DCF Tool

ADP

Automatic Data Processing Inc. – Data Processing, Hosting, and Related Services
ADP is a comprehensive global provider of cloud-based human capital management (HCM) solutions that unite HR, payroll, talent, time, tax and benefits administration, and a leader in business outsourcing services, analytics and compliance expertise. Its unmatched experience, deep insights and cutting-edge technology has transformed human resources from a back-office administrative function to a strategic business advantage.
Analysis Results
Intrinsic Value $88.19
Latest Price $226.19
Relative Value 156% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 5.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 5.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 2.19 2.02
2024 2.31 1.97
2025 2.44 1.92
2026 2.58 1.87
2027 2.73 1.82
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 43.7 billion. This corresponds to a present value of 27.0 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 9.61 billion. Adding in the terminal value gives a total present value of 36.6 billion.

There are presently 415.0 million outstanding shares, so the intrinsic value per share is 88.19.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 54,804,900,000
Current Cash 1,436,300,000
Current Liabilities 55,158,700,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,790,100,000
Change in NCWC -1,861,900,000
EBIT 3,803,200,000
Tax Provision 855,200,000
Depreciation and Amortization 515,100,000
Capital Expenditure -553,400,000
Unlevered Free Cash Flow 1,048,002,329
Current Assets 40,741,800,000
Current Cash 2,575,200,000
Current Liabilities 38,094,800,000
Current Debt 0
Non-Cash Working Capital (NCWC) 71,800,000
Change in NCWC -459,000,000
EBIT 3,324,600,000
Tax Provision 762,700,000
Depreciation and Amortization 510,700,000
Capital Expenditure -505,900,000
Unlevered Free Cash Flow 2,116,005,016
Current Assets 31,564,100,000
Current Cash 1,908,500,000
Current Liabilities 30,126,600,000
Current Debt 1,001,800,000
Non-Cash Working Capital (NCWC) 530,800,000
Change in NCWC 775,900,000
EBIT 3,141,700,000
Tax Provision 716,100,000
Depreciation and Amortization 480,000,000
Capital Expenditure -616,400,000
Unlevered Free Cash Flow 3,074,302,692
Current Assets 34,342,300,000
Current Cash 1,959,700,000
Current Liabilities 32,627,700,000
Current Debt 0
Non-Cash Working Capital (NCWC) -245,100,000
Change in NCWC 291,800,000
EBIT 3,024,400,000
Tax Provision 712,800,000
Depreciation and Amortization 409,000,000
Capital Expenditure -566,500,000
Unlevered Free Cash Flow 2,441,441,442
Current Assets 32,050,000,000
Current Cash 2,173,300,000
Current Liabilities 30,413,600,000
Current Debt 0
Non-Cash Working Capital (NCWC) -536,900,000
Change in NCWC -596,100,000
EBIT 2,511,700,000
Tax Provision 550,300,000
Depreciation and Amortization 377,600,000
Capital Expenditure -470,800,000
Unlevered Free Cash Flow 1,185,769,485
Current Assets 32,658,700,000
Current Cash 2,783,600,000
Current Liabilities 29,815,900,000
Current Debt 0
Non-Cash Working Capital (NCWC) 59,200,000
Change in NCWC -379,200,000
EBIT 2,326,800,000
Tax Provision 797,700,000
Depreciation and Amortization 316,100,000
Capital Expenditure -470,600,000
Unlevered Free Cash Flow 1,059,787,068
Current Assets 39,500,400,000
Current Cash 3,214,600,000
Current Liabilities 35,847,400,000
Current Debt 0
Non-Cash Working Capital (NCWC) 438,400,000
Change in NCWC 408,800,000
EBIT 2,190,500,000
Tax Provision 741,300,000
Depreciation and Amortization 288,600,000
Capital Expenditure -386,000,000
Unlevered Free Cash Flow 1,775,262,129
Current Assets 28,809,200,000
Current Cash 1,665,900,000
Current Liabilities 27,113,700,000
Current Debt 0
Non-Cash Working Capital (NCWC) 29,600,000
Change in NCWC -53,000,000
EBIT 2,014,000,000
Tax Provision 694,200,000
Depreciation and Amortization 277,900,000
Capital Expenditure -335,500,000
Unlevered Free Cash Flow 1,228,208,615
Current Assets 25,833,400,000
Current Cash 4,015,800,000
Current Liabilities 23,908,000,000
Current Debt 2,173,000,000
Non-Cash Working Capital (NCWC) 82,600,000
Change in NCWC 95,600,000
EBIT 2,222,700,000
Tax Provision 772,000,000
Depreciation and Amortization 336,200,000
Capital Expenditure -367,700,000
Unlevered Free Cash Flow 1,532,414,877
Current Assets 26,201,000,000
Current Cash 1,727,100,000
Current Liabilities 24,732,800,000
Current Debt 245,900,000
Non-Cash Working Capital (NCWC) -13,000,000
Change in NCWC -350,700,000
EBIT 2,039,900,000
Tax Provision 720,200,000
Depreciation and Amortization 317,000,000
Capital Expenditure -282,900,000
Unlevered Free Cash Flow 1,018,441,783
Current Assets 25,155,600,000
Current Cash 1,578,500,000
Current Liabilities 23,239,400,000
Current Debt 0
Non-Cash Working Capital (NCWC) 337,700,000
Change in NCWC -36,100,000
EBIT 1,959,000,000
Tax Provision 733,600,000
Depreciation and Amortization 323,300,000
Capital Expenditure -249,600,000
Unlevered Free Cash Flow 1,319,382,903

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