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    The Bull Case For ADP Could Change Following Weak Small-Business Hiring And Resilient Wage Growth – Learn Why

    Simply Wall St·12/07/2025 23:22:03
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    • In early December 2025, Automatic Data Processing’s National Employment Report showed private employers shed 32,000 jobs in November, with broad-based hiring weakness led by small businesses and pockets of softness in manufacturing, information, construction, and professional and business services.
    • Despite this hiring slowdown, the same report showed continued wage growth, with pay for job-stayers and job-changers still rising, highlighting an unusual mix of weaker employment demand alongside resilient pay gains.
    • We’ll examine how this weaker-than-expected private payrolls reading, especially the small-business pullback, may reshape Automatic Data Processing’s existing investment narrative.

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    Automatic Data Processing Investment Narrative Recap

    To own ADP, you generally need to believe in long term demand for outsourced, cloud based HR and payroll services, supported by the company’s scale and profitability. The weak November ADP jobs report highlights softer small business hiring and payrolls, which could reinforce concerns about slowing U.S. payroll growth in the near term, but it does not materially change the core investment case or the key risk around moderating pay per control metrics and retention.

    The most relevant recent update here is ADP’s Q3 FY2025 earnings, where revenue grew year on year and guidance pointed to mid single digit revenue growth. That backdrop of steady, if slower, growth helps frame the latest employment data as a potential short term headwind to payroll linked metrics, rather than a shift in the broader catalyst of ongoing adoption of ADP’s Next Gen cloud and AI driven HR platforms.

    Yet while the business appears resilient, investors should still pay close attention to slowing payroll growth and the possibility that...

    Read the full narrative on Automatic Data Processing (it's free!)

    Automatic Data Processing's narrative projects $24.3 billion revenue and $5.1 billion earnings by 2028. This requires 5.7% yearly revenue growth and about a $1.0 billion earnings increase from $4.1 billion today.

    Uncover how Automatic Data Processing's forecasts yield a $293.23 fair value, a 12% upside to its current price.

    Exploring Other Perspectives

    ADP Community Fair Values as at Dec 2025
    ADP Community Fair Values as at Dec 2025

    Four fair value estimates from the Simply Wall St Community span roughly US$276 to US$388 per share, underlining how far apart views on ADP’s worth can be. Against this wide range, the recent ADP jobs report and concerns about slower U.S. payroll growth give you a concrete risk to weigh as you compare these different viewpoints on the company’s future performance.

    Explore 4 other fair value estimates on Automatic Data Processing - why the stock might be worth as much as 48% more than the current price!

    Build Your Own Automatic Data Processing Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.