Automatic Data Processing Expects $21.8 Billion Revenue, Continues 51-Year Dividend Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
0mins
Source: NASDAQ.COM
- Stable Revenue Source: Automatic Data Processing anticipates a revenue of $21.8 billion for the fiscal year, reflecting a 5.8% increase, which underscores its strong market position in payroll processing and tax reporting, enabling consistent dividends for shareholders.
- Dividend Growth Strength: The company has raised its per-share dividend for 51 consecutive years, with a forward-looking dividend yield of 2.6%, indicating its stable profitability and enhancing investor confidence in its long-term investment value.
- Walmart's Market Dominance: Walmart's stock price has surged 156% over the past three years, and while its current dividend yield is only 0.8%, its significant influence in the U.S. retail market and ongoing stock buyback programs create additional value for shareholders.
- Growth Potential in Water Sector: American States Water has increased its dividend for 70 consecutive years, with an average annual growth of over 8% in the past decade, and with rising water scarcity and electricity demand, its market performance is expected to continue outperforming the broader market.
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Analyst Views on ADP
Wall Street analysts forecast ADP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ADP is 290.27 USD with a low forecast of 230.00 USD and a high forecast of 332.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
1 Buy
7 Hold
3 Sell
Hold
Current: 233.990
Low
230.00
Averages
290.27
High
332.00
Current: 233.990
Low
230.00
Averages
290.27
High
332.00
About ADP
Automatic Data Processing, Inc. is a provider of cloud-based human capital management (HCM) solutions. Its segments include Employer Services and Professional Employer Organization (PEO). Its Employer Services segment serves clients ranging from single-employee small businesses to large enterprises with tens of thousands of employees around the world, offering a range of technology-based HCM solutions, including its cloud-based platforms, and human resource outsourcing (HRO) (other than PEO) solutions. Its offerings include Payroll Services, Benefits Administration, Talent Management, HR Management, Workforce Management, Compliance Services, Insurance Services and Retirement Services. Its PEO business, called ADP TotalSource, provides clients with guidance, technology, comprehensive employee benefits, risk management, safety, and workers’ compensation program. Its compensation management software supports the compensation planning needs.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
January 2026 ADP Employment Report Analysis
- Employment Growth Overview: In January 2026, the U.S. private sector added 22,000 jobs, with the education and health services sector standing out by adding 74,000 jobs, indicating sustained demand and potential growth opportunities in this area despite overall lackluster hiring.
- Industry Change Analysis: Manufacturing has lost jobs every month since March 2024, highlighting challenges faced by the sector, while professional and business services, along with large employers, also saw job reductions, reflecting the fragility of economic recovery.
- Wage Growth Trends: Wage growth for job-stayers remained stable at 4.5% year-over-year, while job-changers experienced a slight slowdown to 6.4%, which may impact employee mobility and recruitment strategies in a competitive labor market.
- Data Revision and Outlook: The total number of jobs added in 2025 was 398,000, a significant drop from 771,000 in 2024, indicating a continued slowdown in the labor market; ADP is set to release the next employment report on March 4, 2026, to further monitor market dynamics.
See More
ADP Reports Strong Q2 Results Exceeding Expectations
- Revenue Growth: ADP's Q2 revenue reached $5.36 billion, surpassing analyst expectations of $5.34 billion with a year-over-year increase of 6%, indicating strong market performance and sustained client demand.
- Profitability Improvement: Adjusted EBIT rose 10% to $1.4 billion, with EBIT margin increasing by 80 basis points to 26.0%, reflecting the company's success in cost control and service efficiency.
- Segment Performance: Revenues from Employer Services and PEO Services both grew by 6%, reaching $3.61 billion and $1.76 billion respectively, demonstrating ADP's stable growth and competitive position in its core business areas.
- Outlook Adjustment: ADP raised its FY26 revenue growth outlook to 6%, expecting to reach $21.8 billion, with adjusted EPS growth projected at 9%-10%, showcasing the company's confidence in future performance and proactive market strategies.
See More
ADP Reports Strong Q2 Earnings, Raises Full-Year Guidance
- Significant Revenue Growth: ADP reported a 6% revenue increase in Q2, with an 80 basis point expansion in adjusted EBIT margin and an 11% rise in adjusted EPS, reflecting robust performance across international, U.S. enterprise, and small business segments, thereby boosting market confidence.
- Record Client Satisfaction: The company achieved its highest-ever client satisfaction in Q2, despite a modest decline in employer services retention rate, indicating successful customer relationship management and strong brand loyalty.
- Strategic Investments and Product Innovation: The acquisition of WorkForce Software enabled the launch of the ADP WorkForce Suite, winning several new clients in Q2, which further solidifies its competitive position, while the introduction of the Save4Retirement plan expands its retirement service offerings.
- Upgraded Full-Year Guidance: ADP raised its fiscal 2026 revenue growth outlook to approximately 6% and adjusted EPS growth forecast to 9% to 10%, alongside a $6 billion stock repurchase authorization, demonstrating strong confidence in future growth prospects.
See More
ADP Launches Intelligent Assistants to Enhance HR Efficiency
- Intelligent Assistant Innovation: ADP's newly launched intelligent assistants leverage over 75 years of workforce data to reduce manual tasks in HR and payroll management, enhancing efficiency and enabling better employee management for organizations.
- Data-Driven Decision Support: ADP Assist agents automatically audit payroll variances and suggest solutions, ensuring payroll processing accuracy and efficiency, thereby reducing operational risks for businesses.
- Personalized Employee Support: The new system provides personalized answers based on company policies for employees, alleviating the help desk burden on HR personnel, allowing them to focus more on supporting employees and enhancing the overall work experience.
- Global Data Platform Advantage: ADP's global data platform powers the intelligent assistants, ensuring they provide higher-quality insights and predictive capabilities, helping businesses make more informed decisions.
See More
ADP Launches Intelligent Assistants to Enhance HR Efficiency
- Launch of Intelligent Assistants: ADP has introduced new ADP Assist agents that leverage advanced intelligence to address real challenges in HR and payroll management, aiming to enhance employee experience and work efficiency.
- Data-Driven Innovation: Built on ADP's global data platform, these agents integrate proprietary workforce insights with automation to help companies manage employees more efficiently while ensuring security and compliance.
- Personalized Support: ADP Assist agents provide tailored intelligent support for employees, managers, and HR practitioners, enhancing interpersonal connections and value at work through insights derived from over 75 years of multi-generational workforce data.
- Global Impact: ADP's global data platform spans millions of workers, offering high-quality insights and predictive capabilities that enable companies to better understand employee needs, thereby driving business success.
See More
Three Major Stocks Reveal Significant Buyback Increases Following Over 20% Declines
Large-Cap Stocks Buyback Announcements: Several large-cap stocks have announced significant buyback programs amid a decline of over 20% from their recent highs, suggesting management believes their shares are undervalued.
ADP's Performance and Challenges: ADP reported strong fiscal Q1 earnings but saw its shares drop nearly 7% following the announcement, indicating concerns about a weak hiring environment despite beating sales estimates.
Costar's Competitive Moves: Costar Group is actively challenging Zillow's dominance in the residential real estate market by investing heavily in AI tools and announcing a substantial share buyback program, signaling management's confidence in the stock.
Paychex's Strategic Buyback: Paychex has initiated a $1 billion share repurchase program, reflecting management's belief in the stock's value, while also facing pressures from hiring market uncertainties that have affected its stock performance.
See More
January 2026 ADP Employment Report Analysis
- Employment Growth Overview: In January 2026, the U.S. private sector added 22,000 jobs, with the education and health services sector standing out by adding 74,000 jobs, indicating sustained demand and potential growth opportunities in this area despite overall lackluster hiring.
- Industry Change Analysis: Manufacturing has lost jobs every month since March 2024, highlighting challenges faced by the sector, while professional and business services, along with large employers, also saw job reductions, reflecting the fragility of economic recovery.
- Wage Growth Trends: Wage growth for job-stayers remained stable at 4.5% year-over-year, while job-changers experienced a slight slowdown to 6.4%, which may impact employee mobility and recruitment strategies in a competitive labor market.
- Data Revision and Outlook: The total number of jobs added in 2025 was 398,000, a significant drop from 771,000 in 2024, indicating a continued slowdown in the labor market; ADP is set to release the next employment report on March 4, 2026, to further monitor market dynamics.
See More
ADP Reports Strong Q2 Results Exceeding Expectations
- Revenue Growth: ADP's Q2 revenue reached $5.36 billion, surpassing analyst expectations of $5.34 billion with a year-over-year increase of 6%, indicating strong market performance and sustained client demand.
- Profitability Improvement: Adjusted EBIT rose 10% to $1.4 billion, with EBIT margin increasing by 80 basis points to 26.0%, reflecting the company's success in cost control and service efficiency.
- Segment Performance: Revenues from Employer Services and PEO Services both grew by 6%, reaching $3.61 billion and $1.76 billion respectively, demonstrating ADP's stable growth and competitive position in its core business areas.
- Outlook Adjustment: ADP raised its FY26 revenue growth outlook to 6%, expecting to reach $21.8 billion, with adjusted EPS growth projected at 9%-10%, showcasing the company's confidence in future performance and proactive market strategies.
See More
ADP Reports Strong Q2 Earnings, Raises Full-Year Guidance
- Significant Revenue Growth: ADP reported a 6% revenue increase in Q2, with an 80 basis point expansion in adjusted EBIT margin and an 11% rise in adjusted EPS, reflecting robust performance across international, U.S. enterprise, and small business segments, thereby boosting market confidence.
- Record Client Satisfaction: The company achieved its highest-ever client satisfaction in Q2, despite a modest decline in employer services retention rate, indicating successful customer relationship management and strong brand loyalty.
- Strategic Investments and Product Innovation: The acquisition of WorkForce Software enabled the launch of the ADP WorkForce Suite, winning several new clients in Q2, which further solidifies its competitive position, while the introduction of the Save4Retirement plan expands its retirement service offerings.
- Upgraded Full-Year Guidance: ADP raised its fiscal 2026 revenue growth outlook to approximately 6% and adjusted EPS growth forecast to 9% to 10%, alongside a $6 billion stock repurchase authorization, demonstrating strong confidence in future growth prospects.
See More
ADP Launches Intelligent Assistants to Enhance HR Efficiency
- Intelligent Assistant Innovation: ADP's newly launched intelligent assistants leverage over 75 years of workforce data to reduce manual tasks in HR and payroll management, enhancing efficiency and enabling better employee management for organizations.
- Data-Driven Decision Support: ADP Assist agents automatically audit payroll variances and suggest solutions, ensuring payroll processing accuracy and efficiency, thereby reducing operational risks for businesses.
- Personalized Employee Support: The new system provides personalized answers based on company policies for employees, alleviating the help desk burden on HR personnel, allowing them to focus more on supporting employees and enhancing the overall work experience.
- Global Data Platform Advantage: ADP's global data platform powers the intelligent assistants, ensuring they provide higher-quality insights and predictive capabilities, helping businesses make more informed decisions.
See More
ADP Launches Intelligent Assistants to Enhance HR Efficiency
- Launch of Intelligent Assistants: ADP has introduced new ADP Assist agents that leverage advanced intelligence to address real challenges in HR and payroll management, aiming to enhance employee experience and work efficiency.
- Data-Driven Innovation: Built on ADP's global data platform, these agents integrate proprietary workforce insights with automation to help companies manage employees more efficiently while ensuring security and compliance.
- Personalized Support: ADP Assist agents provide tailored intelligent support for employees, managers, and HR practitioners, enhancing interpersonal connections and value at work through insights derived from over 75 years of multi-generational workforce data.
- Global Impact: ADP's global data platform spans millions of workers, offering high-quality insights and predictive capabilities that enable companies to better understand employee needs, thereby driving business success.
See More
Three Major Stocks Reveal Significant Buyback Increases Following Over 20% Declines
Large-Cap Stocks Buyback Announcements: Several large-cap stocks have announced significant buyback programs amid a decline of over 20% from their recent highs, suggesting management believes their shares are undervalued.
ADP's Performance and Challenges: ADP reported strong fiscal Q1 earnings but saw its shares drop nearly 7% following the announcement, indicating concerns about a weak hiring environment despite beating sales estimates.
Costar's Competitive Moves: Costar Group is actively challenging Zillow's dominance in the residential real estate market by investing heavily in AI tools and announcing a substantial share buyback program, signaling management's confidence in the stock.
Paychex's Strategic Buyback: Paychex has initiated a $1 billion share repurchase program, reflecting management's belief in the stock's value, while also facing pressures from hiring market uncertainties that have affected its stock performance.
See More
