TacticScaleWhat Automatic Data Processing Does & How It Makes Money (ADP)
Updated October 2026 · reflects Automatic Data Processing's latest reported financials
Cloud payroll and HR software and outsourcing provider for employers. ADP earns recurring fees from employers who subscribe to its cloud payroll, HR, and workforce management platforms.
How Automatic Data Processing makes money
ADP earns recurring fees from employers who subscribe to its cloud payroll, HR, and workforce management platforms. Its PEO segment charges client businesses for outsourced HR delivered through a co-employment model that bundles employee benefits, workers' compensation, and risk management.
What Automatic Data Processing does
Automatic Data Processing (ADP), founded in 1949 and headquartered in Roseland, New Jersey, provides cloud-based human capital management solutions to employers worldwide. Its Employer Services segment offers software platforms for businesses of different sizes: RUN Powered by ADP for small business payroll, HR, and compliance; ADP Workforce Now for mid-sized and large companies; and ADP Lyric HCM, which covers HR, payroll, workforce management, talent, and data analytics. This segment also provides HR outsourcing solutions. The PEO Services segment operates under the ADP TotalSource name and uses a co-employment model, meaning ADP shares certain employer responsibilities with its clients. Along with HR guidance and technology, clients get comprehensive employee benefits and a risk management, safety, and workers' compensation program. Together, the two segments make ADP a core back-office partner for companies that manage employees.
Products & services
- RUN Powered by ADP
- ADP Workforce Now
- ADP Lyric HCM
- ADP TotalSource
What is Automatic Data Processing worth?
On an owner-earnings DCF, Automatic Data Processing's most-likely value is about $302 versus a recent price near $271 (11% below fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$137) with a margin of safety — so the honest verdict here is “Fairly priced — no edge.” Fair value earns its keep only at the extremes, not in the wide middle.
Price sits in the normal range — fair value isn't actionable here; it earns its keep only when price drops below the no-growth floor, or runs to roughly double the optimistic case.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →
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