ADP stock holds close to record levels as fiscal 2026 profits climb
Published on 08/29/2026 at 14:46 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS
Automatic Data Processing (ISIN US0530151036) is trading just below record territory as of August 28, 2026, with ADP stock closing at $287.48 on the Nasdaq while investors weigh a solid finish to fiscal 2026 and fresh guidance for fiscal 2027. Recent coverage highlights how the latest quarterly results and updated outlook are helping to support the valuation in the upper $280s even as broader markets remain volatile.
Price holds in upper $280s
Per a recent market-data summary ADP shares last changed hands at $287.48 on August 28, 2026, at the close of regular Nasdaq trading, with a modest post-market pullback to $286.34 later in the evening. Another trading-system overview flags $287.48 as the current reference price, alongside key technical levels at $189.67, $223.53 and $256.90 that mark earlier support and resistance zones. Taken together, these references show the stock trading well above those prior levels, underscoring how much the share price has climbed over the past year.
A separate valuation-focused article notes that ADP recently traded around $284.68, with a 30-day share price return of 7.76 percent and a 90-day return of 28.33 percent as of late August 2026. The same analysis cites a one-year total shareholder return of negative 3.78 percent but positive returns over three and five years at 19.97 percent and 53.83 percent respectively, suggesting that while the stock has had shorter-term setbacks, longer horizons remain profitable.
Fiscal 2026 earnings and guidance
The latest results show that ADP is currently benefiting from both revenue growth and expanding margins. A detailed recap reports that in the fourth quarter of fiscal 2026 ADP delivered adjusted earnings of $2.64 per share, topping the consensus estimate of $2.59 and rising 17 percent from $2.26 in the same quarter a year earlier. Revenue in that quarter was $5.47 billion, up 7 percent year over year and slightly ahead of the roughly $5.42 billion figure analysts were expecting, indicating that the company is still gaining scale in its core human capital management offerings.
The same quarterly breakdown notes that adjusted EBIT reached $1.37 billion in the fourth quarter of fiscal 2026, an increase of 13 percent compared with the prior-year period, while the adjusted EBIT margin widened by 140 basis points to 25.1 percent. That margin expansion shows that ADP converted revenue growth into improved operating leverage, aided by a richer mix of value-added services and stronger client-funds income. Adjusted net earnings rose 14 percent to $1.05 billion, while GAAP net earnings climbed 7 percent to $978.6 million and GAAP EPS advanced 10 percent to $2.45, underlining how profitability improved on both an adjusted and reported basis.
Looking ahead, recent coverage of the same quarter highlights that ADP has issued guidance for fiscal 2027 calling for earnings per share in a range of $12.12 to $12.34. The consensus view cited in that report suggests that analysts on average expect EPS of roughly $12.26 for the current fiscal year, placing market expectations around the midpoint of the companys own range. That sets up a clear comparison for investors: fiscal 2026 diluted EPS for the full year was reported at $10.94 according to a business-model analysis that summarizes ADPs fiscal 2026 performance, so the guidance range points to double-digit EPS growth if management delivers.
Full-year fiscal 2026 performance
The same business-model review emphasizes that fiscal 2026, which ended on June 30, 2026, was another year of steady expansion for ADP. It reports that total revenue reached $21,947.4 million in fiscal 2026 compared with $20,560.9 million in fiscal 2025, a 6.7 percent increase as more employers adopted ADPs payroll and human capital management solutions. Within that total, Employer Services revenue was $14,831.4 million, up 6.8 percent from $13,883.1 million the year before, while Professional Employer Organization (PEO) Services contributed $7,128.1 million, up 6.5 percent from $6,690.4 million, highlighting balanced growth across the segments.
The analysis further notes that interest on funds held for clients produced $1,354.8 million in fiscal 2026, an increase from $1,189.1 million in fiscal 2025 and representing 23.6 percent of pretax earnings. With higher interest rates still supporting yields on the roughly $40.4 billion of client payroll cash held in transit, this line item has been an important contributor to profit growth. Pretax earnings for fiscal 2026 came in at $5,730.3 million, up from $5,310.1 million for fiscal 2025, reflecting a 7.9 percent increase, while net earnings rose from $4,079.7 million to $4,413.5 million, an 8.2 percent advance. Diluted EPS for fiscal 2026 was $10.94 compared with $9.98 a year earlier, a 9.6 percent gain that underpins the companys confidence in its new fiscal 2027 EPS range.
Operating efficiency metrics in that review also point to disciplined cost control. The summary notes that ADP recorded operating expenses of $10,240.6 million in fiscal 2026, with selling, general and administrative costs of $4,408.2 million and research and development spending of $1,028.8 million, supporting a workforce of roughly 67,000 people worldwide. With pretax margin at 26.1 percent and adjusted EBIT margin at 26.8 percent, up 80 basis points, the company has managed to protect profitability even as it invests in technology and client service capabilities.
Valuation and AI-driven investments
The valuation commentary mentioned earlier suggests that the market is currently weighing ADPs pricing against its growth prospects and new technology investments. The analysis indicates that the most followed narrative values the shares at $286.67, slightly above the latest close cited at $284.68 in that piece. That small gap reflects how investors debate whether the recent rally, including a 7.76 percent gain over 30 days and a 28.33 percent gain over 90 days, has already priced in much of the earnings and margin expansion achieved in fiscal 2026.
The same article underscores that ADP is investing in artificial intelligence and cloud-based human capital management platforms, aligning with a broad push across the industry to add analytics, automation and decision-support tools for HR departments. While those technology initiatives are harder to quantify than revenue and margin figures, they form part of the justification for a premium valuation relative to some traditional business-services peers, especially when combined with ADPs consistent dividend track record and strong return on equity.
Institutional interest and dividend policy
Institutional flows also suggest confidence in the long-term story. A recent portfolio filing summary notes that a major public retirement system recently disclosed a new position in ADP, with the filing citing the same $287.48 opening level for the shares on the reference trading day. While the position size is modest relative to ADPs market capitalization, such allocations often reflect a focus on durable cash flows, high returns on equity and a history of dividend growth.
The filing summary highlights that ADP maintains a net margin of 20.11 percent and a return on equity of 71.34 percent based on the latest reported quarter, metrics that help explain why income-oriented and quality-focused investors remain interested. It also notes a planned quarterly dividend of $1.70 per share for shareholders of record on September 11, 2026, reinforcing ADPs identity as a consistent dividend payer. At the current price range near $287, that quarterly payment equates to an annualized dividend of $6.80, which would imply a forward yield in the low single digits, yet backed by strong free cash flow and rising earnings.
The same overview compiles the consensus viewpoint on the stock, indicating that the coverage universe currently assigns ADP a consensus rating of Hold with an average target price of $273.50. That target is slightly below the latest $287.48 close and the $286.67 narrative fair value in the valuation analysis, which suggests that the stock is trading modestly above the average target. For investors, that discrepancy underscores how valuation discipline and growth expectations intersect, particularly given the double-digit EPS growth implied by fiscal 2027 guidance.
How ADP makes money
The business-model analysis referenced earlier provides helpful context on how ADP converts its client relationships into revenue and profit. It explains that ADP earns most of its revenue from recurring per-employee subscription and transaction fees in its Employer Services segment, which covers payroll processing, tax services and a range of human capital management modules. These fees scale with client headcount, making ADP sensitive to employment trends while also benefiting from upselling additional modules and features.
The PEO Services segment, which generated $7,128.1 million in fiscal 2026, operates on a different economics model built around co-employment arrangements. Here, ADP collects a much larger per-employee fee that includes not only payroll and HR services but also bundled insurance and shared liability. This structure can deliver higher revenue per client but also involves more complex risk management and regulatory compliance. Complementing these two core segments, ADP captures interest income on client funds held for payroll and tax payments, a line item that produced $1,354.8 million in fiscal 2026. While this income can fluctuate with interest rates, its contribution of 23.6 percent of pretax earnings in fiscal 2026 demonstrates its current importance.
The same review emphasizes that ADPs ability to sell the same underlying payroll and HR capabilities multiple times across different service tiers, packaging and pricing models has been a key factor in its long-term profitability. With pretax earnings of $5,730.3 million and net earnings of $4,413.5 million in fiscal 2026, the company has demonstrated that its mix of subscription revenue, PEO fees and client-funds interest can yield robust margins when managed efficiently. For investors evaluating ADP stock at levels close to $287, that combination of recurring revenue, operating leverage and interest-sensitive income is central to the thesis.
Representative HCM product
One representative example of ADPs offerings is its flagship human capital management suite, which bundles payroll, time and attendance, benefits administration and talent management into a single cloud-based platform. Clients can configure this suite to cover everything from basic payroll runs and tax filings to more advanced functions such as applicant tracking, performance reviews and analytics dashboards that monitor workforce trends. The platform is delivered as a subscription service, with pricing typically tied to the number of employees processed and the specific modules activated, which provides ADP with a predictable revenue stream that scales with client growth.
Stock level and investor takeaway
As of the close on August 28, 2026, ADP stock was quoted at $287.48 on the Nasdaq, with a modest post-market dip to $286.34 later that evening, placing the shares just a few dollars above the $286.67 narrative valuation reference cited in one recent analysis. At this level, the stock trades at a premium to the $273.50 average price target compiled in consensus data while offering investors exposure to a business that delivered fiscal 2026 revenue of $21,947.4 million and diluted EPS of $10.94 and is guiding to EPS of $12.12 to $12.34 in fiscal 2027.
Fact box
Company: Automatic Data Processing, Inc.
ISIN: US0530151036
Ticker: ADP
Exchange: Nasdaq
Price (as of August 28, 2026, 4:00 p.m. ET): $287.48 USD
Market cap: data not specified in available sources
Sector / Industry: Business services / Human capital management
Index membership: S&P 500
