Automatic Data Processing Stock Trades Below 16x Fiscal 2027 EPS After 42% Drop
Automatic Data Processing shares plunged over 42% from their $330 52-week high to $189, trading below 18x fiscal 2026 EPS of $11 and under 16x fiscal 2027 EPS of $12. Q2 revenue rose 6% to $5.4 billion and adjusted EPS climbed 11% to $2.62, with guidance raised.
1. Share Price Decline and Valuation
Shares of Automatic Data Processing have fallen over 42% from their 52-week high of $330 to about $189, pushing its forward P/E below 18x on fiscal 2026 EPS of $11 and under 16x on fiscal 2027 EPS of $12.
2. Sell-Off Drivers
Emerging AI-native HR platforms free of legacy constraints and the rise of agentic AI raising the prospect of workforce reductions have spooked investors, compounded by private payroll data missing estimates and U.S. job openings at six-year lows.
3. Q2 Fiscal 2026 Results
In Q2 fiscal 2026, ADP delivered $5.4 billion in revenue, up 6% year-over-year, and adjusted EPS of $2.62, an 11% increase, leading management to raise full-year guidance.
4. Recovery Thesis and Competitive Moat
A re-rating to a 25x multiple on 2026 estimates implies a $274 share price and 30x on 2027 grants $300, while its data edge—processing payroll for 40 million workers—and compliance capabilities support moat durability.