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DCF Valuation
Base-case fair value
$322.91
Intrinsic $430.55 · 25% MOS
Current price: $218.41
Base-case summary
Our base-case DCF for Automatic Data Processing Inc (ADP) projects 10 years of free cash flow growth at 12.7% for years 1–5 and 6.4% for years 6–10, anchored to 12.7% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $5.3B in trailing free cash flow, this produces an intrinsic value of $430.55 per share. A 25% safety margin gives a fair value of $322.91, suggesting the stock is currently 48% undervalued against the $218.41 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$5.3B
Cash & equivalents
$3.2B
Total debt
$4.4B
Shares outstanding
403M