Automatic Data Processing Job Gains Slow to 25,500; Valuation at $214
ADP•U.S. private employers added 25,500 jobs weekly on average over the four weeks ending May 30, slowing from 29,000 the prior week and 40,750 in early May. A DCF valuation sets Automatic Data Processing’s fair value at $214 per share, roughly 4% below its market price of $223.
1. Weekly Employment Growth Slows
ADP’s preliminary NER Pulse shows U.S. private employers added an average of 25,500 jobs per week over the four weeks ending May 30, marking the fourth straight week of slowing gains from 29,000 the prior week and a peak of 40,750 in early May.
2. DCF Valuation Indicates Slight Overvaluation
A discounted cash flow analysis pegs Automatic Data Processing’s intrinsic value at $214 per share, about 4% below its recent trading price of $223, based on mid-single-digit revenue growth assumptions and an 8% discount rate.
3. Implications for ADP Performance
Slower job gains could modestly reduce demand for ADP’s payroll processing services, while the valuation gap may temper investor sentiment or prompt profit‐taking if broader market conditions remain cautious.
