Automatic Data Processing Stock Pulls Back to Support – Smart Entry?
Automatic Data Processing (ADP) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($235.18 – $259.94), levels from which it has bounced meaningfully before. In the last 10 years, Automatic Data Processing stock received buying interest at this level 5 times and subsequently went on to generate 9.1% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 1/31/2024 | 4.1% | 23 |
| 3/7/2024 | 4.0% | 76 |
| 6/14/2024 | 2.7% | 10 |
| 7/15/2024 | 9.1% | 35 |
| 8/19/2024 | 25.4% | 291 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for ADP?
Rebound likely, contingent on sustained PEO growth.
ADP beat Q2 fiscal 2026 earnings and raised FY26 guidance, projecting 6% revenue growth and 9-10% EPS growth, supported by interest income and a $6B buyback. The stock is at a 12-month low around $247, beneath key moving averages, reflecting recent analyst target cuts and moderated Professional Employer Organization (PEO) worksite employee growth. However, industry tailwinds like increased HR/payroll complexity, AI integration (ADP Assist), and compliance changes underpin long-term demand for ADP’s solutions. Rebound potential hinges on PEO segment stabilization and broader market sentiment outweighing short-term technicals.
- Automatic Data Processing Stock Capital Return Hits $28 Bil
- Automatic Data Processing Stock at Support Zone – Bargain or Trap?
- Ten-Year Tally: Automatic Data Processing Stock Delivers $28 Bil Gain
- Paycom Software vs Automatic Data Processing: Which Is the Stronger Buy Today?
- ADP Near Crucial Support Level – Buy Signal Ahead
- What To Expect From ADP’s Q1 Results?
How Do ADP Financials Look Right Now?
- Revenue Growth: 6.6% LTM and 7.1% last 3-year average.
- Cash Generation: Nearly 19.7% free cash flow margin and 26.3% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for ADP was 6.6%.
- Valuation: ADP stock trades at a PE multiple of 23.6
| ADP | S&P Median | |
|---|---|---|
| Sector | Industrials | – |
| Industry | Human Resource & Employment Services | – |
| PE Ratio | 23.6 | 24.4 |
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| LTM* Revenue Growth | 6.6% | 6.4% |
| 3Y Average Annual Revenue Growth | 7.1% | 5.6% |
| Min Annual Revenue Growth Last 3Y | 6.6% | 0.1% |
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| LTM* Operating Margin | 26.3% | 18.8% |
| 3Y Average Operating Margin | 25.9% | 18.3% |
| LTM* Free Cash Flow Margin | 19.7% | 14.0% |
*LTM: Last Twelve Months | For more details on ADP fundamentals, read Buy or Sell ADP Stock.
And What If The Support Breaks?
ADP is not immune to big sell-offs. It fell about 36% in both the Dot-Com Bubble and the Global Financial Crisis. The Covid pandemic hit even harder, with a nearly 40% drop from its peak. Smaller shocks like 2018’s correction and the recent inflation scare still cost the stock around 19% to 22%. Solid fundamentals don’t erase vulnerability when markets turn south. Even steady players like ADP face meaningful declines in tough times.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, and outlook changes. Read ADP Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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