Automatic Data Processing, Inc. PEG Ratio
Data as of June 01, 2026
PEG Ratio
2.07
PE Ratio (TTM)
20.71
EPS (TTM)
$10.71
Sector
Technology
How It's Calculated
2.07 = 20.71 ÷ Growth Rate
What This Means
Automatic Data Processing, Inc.'s PEG ratio of 2.07 is above 2, suggesting the stock may be overvalued relative to its growth rate. Investors are paying a premium for each unit of earnings growth.
About Automatic Data Processing, Inc.
Automatic Data Processing, Inc. (ADP) operates in the Technology sector, specifically in Software - Application. With a market capitalization of about $88.68B, it ranks as a large-cap stock — a major established company.
Shares recently traded near $221.84, within a 52-week range of $188.16 to $329.93 (-32.8% from the high, +17.9% from the low). Beta of 0.84 is broadly in line with typical market sensitivity.
Trailing profit margin is about 20.1%, signaling a solid profit margin for its industry.
Understanding This Metric
The PEG ratio adjusts the PE multiple for expected earnings growth, helping compare fast-growing and slow-growing names on a more equal footing. For Automatic Data Processing, Inc., a PEG near 1 is often described as fairly valued relative to growth, though the growth estimate itself can change quickly with guidance revisions.
Sector Comparison
Among Technology names on our S&P 100 coverage, Automatic Data Processing, Inc.'s PEG ratio of 2.07 can be compared with peers such as NVDA (0.65), AAPL (2.72), MSFT (1.39). Sector context helps interpretation, but each company's growth profile and balance sheet differ — use multiple metrics before drawing conclusions. View all Technology stocks.
Key Takeaways
- ADP is grouped in the Technology sector for peer comparisons.
- Recent beta of 0.84 suggests lower-than-market price sensitivity.
- Trailing profit margin of 20.1% provides context for how much earnings support the headline multiple.
Related Tools & Guides
Explore calculators and guides connected to this metric, or view all metrics for ADP.
Other ADP Metrics
Frequently Asked Questions
What is ADP's PEG ratio?
PEG adjusts PE for expected earnings growth: PEG ≈ PE ÷ earnings growth rate. Automatic Data Processing, Inc.'s PEG of 2.07 is a shorthand for growth-at-a-reasonable-price comparisons.
Does PEG suggest growth at a reasonable price?
PEG above 1.5 (2.07) may mean the market prices in high growth — or that growth estimates lag reality.
What are limitations of PEG for ADP?
PEG depends on a single growth estimate, ignores balance sheet risk, and can mislead when earnings are volatile. Use it with PE, margins, and Technology peers — not as a standalone verdict.
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