We publish no single base value for Automatic Data Processing. Our valuation methods put it between $253.42 and $278.82 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $253.42 | -17.7% | free cash flow $4.98bn, growth 6.1% for 5 years, then fading to 3% over 5 more, discounted at 9.13%; stress floor $159.10 |
| Exit multiple (P/E) | $278.82 | -9.5% | earnings per share $12.37 valued at 27.72× (the stock's own median P/E) in 5 years, discounted back |
| Sum of the parts | — | — | no sum of the parts: this run holds no segment disclosure for the name |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 0.77 (5 years of monthly returns against the S&P 500; standard error 0.18) |
| Peer beta | 1.02 (median of 79 S&P 500 Industrials companies) |
| Blend of own and peers | 0.83 (76% own, 24% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 0.89 (0.67 × 0.83 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 9.13% |
Free cash flow grows 6.10% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $4.98bn | — | — |
| Year 1 | 6.10% | $5.29bn | 0.9163 | $4.84bn |
| Year 2 | 6.10% | $5.61bn | 0.8396 | $4.71bn |
| Year 3 | 6.10% | $5.95bn | 0.7693 | $4.58bn |
| Year 4 | 6.10% | $6.31bn | 0.7049 | $4.45bn |
| Year 5 | 6.10% | $6.70bn | 0.6459 | $4.33bn |
| Year 6 | 5.58% | $7.07bn | 0.5919 | $4.19bn |
| Year 7 | 5.07% | $7.43bn | 0.5423 | $4.03bn |
| Year 8 | 4.55% | $7.77bn | 0.4969 | $3.86bn |
| Year 9 | 4.03% | $8.08bn | 0.4553 | $3.68bn |
| Year 10 | 3.52% | $8.37bn | 0.4172 | $3.49bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (9.13% − 3%) | $140.47bn |
| Terminal value in today's money | $58.60bn |
| Present value of years 1–10 | $42.15bn |
| Total present value | $100.76bn |
| Shares outstanding | 397.60m |
| Value per share = total ÷ shares | $253.42 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth 1.1% | Growth 6.1% | Growth 11.1% |
|---|---|---|---|
| 8.13% | $223.33 | $304.35 | $412.72 |
| 9.13% | $187.58 | $253.42 | — |
| 10.13% | $161.81 | $216.82 | — |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 0.77 | 8.59% | $278.65 |
| Peer beta | 1.02 | 9.72% | $230.68 |
| Adjusted beta (used) | 0.89 | 9.13% | $253.42 |
Earnings per share grow on the same fading path as the DCF:
| Year | Growth | Earnings per share |
|---|---|---|
| Now | — | $12.37 |
| Year 1 | 6.10% | $13.12 |
| Year 2 | 5.17% | $13.80 |
| Year 3 | 4.52% | $14.42 |
| Year 4 | 4.06% | $15.01 |
| Year 5 | 3.74% | $15.57 |
| Earnings per share in year 5 | $15.57 |
| Exit P/E (the stock's own median P/E) | 27.72× |
| Value in 5 years = earnings × P/E | $431.66 |
| Discounted at 9.13% over 5 years: ÷ 1.5482 | $278.82 |
We publish no single base value for Automatic Data Processing. Our valuation methods put it between $253.42 and $278.82 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
One-year price simulation: a 10% chance the price is below $238.08 and a 10% chance it is above $448.24 in a year; a 60% chance it is higher than today's $307.92, from 24.56% volatility. The simulation assumes the price drifts up at our discount rate of 9.13% a year.
At $307.92 the price implies free cash flow growing 9.4% a year for five years and then fading toward 3% over five more; its revenue has grown 6.1%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $257.68 | — |
| 9 Oct 2026 | $270.88 | — |
| 16 Oct 2026 | $288.90 | — |
| 23 Oct 2026 | $304.16 | — |
| 30 Oct 2026 | $293.84 | — |
| 6 Nov 2026 | $303.35 | — |
| 12 Nov 2026 | $307.92 | — |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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