Intrinsic value of Automatic Data Processing - ADP

Previous Close

$117.02

  Intrinsic Value

$130.38

stock screener

  Rating & Target

hold

+11%

Previous close

$117.02

 
Intrinsic value

$130.38

 
Up/down potential

+11%

 
Rating

hold

We calculate the intrinsic value of ADP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 52.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.10
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
Revenue, $m
  12,380
  13,098
  13,847
  14,629
  15,446
  16,300
  17,191
  18,124
  19,100
  20,120
  21,189
  22,307
  23,479
  24,706
  25,991
  27,338
  28,750
  30,230
  31,782
  33,410
  35,116
  36,906
  38,784
  40,754
  42,820
  44,988
  47,264
  49,651
  52,157
  54,787
  57,547
Variable operating expenses, $m
 
  7,351
  7,762
  8,190
  8,638
  9,105
  9,594
  10,105
  10,640
  11,199
  11,784
  12,223
  12,865
  13,537
  14,242
  14,980
  15,753
  16,564
  17,415
  18,306
  19,241
  20,222
  21,251
  22,330
  23,463
  24,651
  25,898
  27,206
  28,579
  30,020
  31,532
Fixed operating expenses, $m
 
  3,039
  3,115
  3,193
  3,273
  3,355
  3,438
  3,524
  3,613
  3,703
  3,795
  3,890
  3,988
  4,087
  4,189
  4,294
  4,402
  4,512
  4,624
  4,740
  4,858
  4,980
  5,104
  5,232
  5,363
  5,497
  5,634
  5,775
  5,920
  6,068
  6,219
Total operating expenses, $m
  9,848
  10,390
  10,877
  11,383
  11,911
  12,460
  13,032
  13,629
  14,253
  14,902
  15,579
  16,113
  16,853
  17,624
  18,431
  19,274
  20,155
  21,076
  22,039
  23,046
  24,099
  25,202
  26,355
  27,562
  28,826
  30,148
  31,532
  32,981
  34,499
  36,088
  37,751
Operating income, $m
  2,532
  2,708
  2,971
  3,246
  3,536
  3,840
  4,159
  4,495
  4,848
  5,219
  5,609
  6,194
  6,626
  7,081
  7,560
  8,064
  8,595
  9,154
  9,743
  10,363
  11,016
  11,704
  12,428
  13,191
  13,995
  14,841
  15,732
  16,670
  17,659
  18,699
  19,795
EBITDA, $m
  2,848
  3,027
  3,298
  3,582
  3,880
  4,194
  4,523
  4,869
  5,233
  5,615
  6,017
  6,440
  6,886
  7,354
  7,847
  8,366
  8,913
  9,488
  10,094
  10,732
  11,404
  12,111
  12,856
  13,641
  14,467
  15,337
  16,254
  17,219
  18,235
  19,304
  20,431
Interest expense (income), $m
  78
  78
  60
  133
  210
  289
  372
  459
  550
  645
  745
  849
  958
  1,072
  1,192
  1,317
  1,449
  1,586
  1,731
  1,882
  2,041
  2,207
  2,382
  2,565
  2,757
  2,958
  3,170
  3,391
  3,624
  3,868
  4,125
Earnings before tax, $m
  2,531
  2,630
  2,910
  3,113
  3,326
  3,551
  3,787
  4,035
  4,297
  4,573
  4,864
  5,345
  5,668
  6,009
  6,368
  6,747
  7,147
  7,568
  8,013
  8,481
  8,976
  9,497
  10,047
  10,627
  11,238
  11,883
  12,562
  13,279
  14,034
  14,831
  15,671
Tax expense, $m
  798
  710
  786
  841
  898
  959
  1,022
  1,090
  1,160
  1,235
  1,313
  1,443
  1,530
  1,622
  1,719
  1,822
  1,930
  2,043
  2,163
  2,290
  2,423
  2,564
  2,713
  2,869
  3,034
  3,208
  3,392
  3,585
  3,789
  4,004
  4,231
Net income, $m
  1,733
  1,920
  2,125
  2,273
  2,428
  2,592
  2,764
  2,946
  3,137
  3,339
  3,551
  3,902
  4,138
  4,387
  4,649
  4,925
  5,217
  5,525
  5,849
  6,191
  6,552
  6,933
  7,334
  7,757
  8,204
  8,674
  9,170
  9,694
  10,245
  10,827
  11,440

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,784
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  37,180
  36,383
  38,465
  40,637
  42,906
  45,276
  47,754
  50,345
  53,055
  55,890
  58,858
  61,965
  65,219
  68,627
  72,198
  75,940
  79,862
  83,974
  88,284
  92,805
  97,545
  102,517
  107,733
  113,204
  118,945
  124,968
  131,288
  137,920
  144,881
  152,185
  159,852
Adjusted assets (=assets-cash), $m
  34,396
  36,383
  38,465
  40,637
  42,906
  45,276
  47,754
  50,345
  53,055
  55,890
  58,858
  61,965
  65,219
  68,627
  72,198
  75,940
  79,862
  83,974
  88,284
  92,805
  97,545
  102,517
  107,733
  113,204
  118,945
  124,968
  131,288
  137,920
  144,881
  152,185
  159,852
Revenue / Adjusted assets
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
Average production assets, $m
  1,309
  1,388
  1,468
  1,551
  1,637
  1,728
  1,822
  1,921
  2,025
  2,133
  2,246
  2,365
  2,489
  2,619
  2,755
  2,898
  3,048
  3,204
  3,369
  3,541
  3,722
  3,912
  4,111
  4,320
  4,539
  4,769
  5,010
  5,263
  5,529
  5,807
  6,100
Working capital, $m
  2,843
  65
  69
  73
  77
  81
  86
  91
  95
  101
  106
  112
  117
  124
  130
  137
  144
  151
  159
  167
  176
  185
  194
  204
  214
  225
  236
  248
  261
  274
  288
Total debt, $m
  2,002
  1,544
  3,417
  5,372
  7,414
  9,548
  11,778
  14,109
  16,548
  19,100
  21,771
  24,567
  27,496
  30,563
  33,777
  37,145
  40,675
  44,375
  48,255
  52,323
  56,590
  61,064
  65,758
  70,683
  75,849
  81,270
  86,958
  92,927
  99,191
  105,766
  112,666
Total liabilities, $m
  33,203
  32,745
  34,618
  36,573
  38,615
  40,749
  42,979
  45,310
  47,749
  50,301
  52,972
  55,768
  58,697
  61,764
  64,978
  68,346
  71,876
  75,576
  79,456
  83,524
  87,791
  92,265
  96,959
  101,884
  107,050
  112,471
  118,159
  124,128
  130,392
  136,967
  143,867
Total equity, $m
  3,977
  3,638
  3,846
  4,064
  4,291
  4,528
  4,775
  5,034
  5,305
  5,589
  5,886
  6,196
  6,522
  6,863
  7,220
  7,594
  7,986
  8,397
  8,828
  9,280
  9,755
  10,252
  10,773
  11,320
  11,894
  12,497
  13,129
  13,792
  14,488
  15,219
  15,985
Total liabilities and equity, $m
  37,180
  36,383
  38,464
  40,637
  42,906
  45,277
  47,754
  50,344
  53,054
  55,890
  58,858
  61,964
  65,219
  68,627
  72,198
  75,940
  79,862
  83,973
  88,284
  92,804
  97,546
  102,517
  107,732
  113,204
  118,944
  124,968
  131,288
  137,920
  144,880
  152,186
  159,852
Debt-to-equity ratio
  0.503
  0.420
  0.890
  1.320
  1.730
  2.110
  2.470
  2.800
  3.120
  3.420
  3.700
  3.960
  4.220
  4.450
  4.680
  4.890
  5.090
  5.280
  5.470
  5.640
  5.800
  5.960
  6.100
  6.240
  6.380
  6.500
  6.620
  6.740
  6.850
  6.950
  7.050
Adjusted equity ratio
  0.035
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,733
  1,920
  2,125
  2,273
  2,428
  2,592
  2,764
  2,946
  3,137
  3,339
  3,551
  3,902
  4,138
  4,387
  4,649
  4,925
  5,217
  5,525
  5,849
  6,191
  6,552
  6,933
  7,334
  7,757
  8,204
  8,674
  9,170
  9,694
  10,245
  10,827
  11,440
Depreciation, amort., depletion, $m
  316
  319
  327
  336
  345
  354
  364
  374
  385
  396
  408
  246
  259
  273
  287
  302
  317
  334
  351
  369
  388
  408
  428
  450
  473
  497
  522
  548
  576
  605
  635
Funds from operations, $m
  2,028
  2,239
  2,452
  2,608
  2,773
  2,946
  3,128
  3,320
  3,522
  3,735
  3,959
  4,148
  4,397
  4,659
  4,936
  5,227
  5,535
  5,859
  6,200
  6,560
  6,940
  7,340
  7,762
  8,207
  8,676
  9,171
  9,692
  10,242
  10,821
  11,432
  12,075
Change in working capital, $m
  -98
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
Cash from operations, $m
  2,126
  2,235
  2,448
  2,604
  2,769
  2,942
  3,124
  3,315
  3,517
  3,730
  3,954
  4,143
  4,391
  4,653
  4,929
  5,221
  5,528
  5,851
  6,192
  6,552
  6,931
  7,331
  7,753
  8,197
  8,666
  9,160
  9,681
  10,230
  10,809
  11,418
  12,061
Maintenance CAPEX, $m
  0
  -136
  -145
  -153
  -162
  -171
  -180
  -190
  -200
  -211
  -222
  -234
  -246
  -259
  -273
  -287
  -302
  -317
  -334
  -351
  -369
  -388
  -408
  -428
  -450
  -473
  -497
  -522
  -548
  -576
  -605
New CAPEX, $m
  -471
  -79
  -79
  -83
  -87
  -90
  -95
  -99
  -103
  -108
  -113
  -119
  -124
  -130
  -136
  -143
  -150
  -157
  -164
  -172
  -181
  -190
  -199
  -209
  -219
  -230
  -241
  -253
  -266
  -279
  -293
Cash from investing activities, $m
  5,730
  -215
  -224
  -236
  -249
  -261
  -275
  -289
  -303
  -319
  -335
  -353
  -370
  -389
  -409
  -430
  -452
  -474
  -498
  -523
  -550
  -578
  -607
  -637
  -669
  -703
  -738
  -775
  -814
  -855
  -898
Free cash flow, $m
  7,856
  2,019
  2,224
  2,368
  2,521
  2,681
  2,849
  3,027
  3,214
  3,411
  3,618
  3,790
  4,021
  4,264
  4,520
  4,791
  5,076
  5,377
  5,694
  6,029
  6,382
  6,754
  7,146
  7,560
  7,997
  8,458
  8,943
  9,455
  9,995
  10,564
  11,164
Issuance/(repayment) of debt, $m
  -2
  -458
  1,873
  1,955
  2,042
  2,133
  2,230
  2,332
  2,439
  2,552
  2,671
  2,796
  2,928
  3,067
  3,214
  3,368
  3,530
  3,700
  3,880
  4,068
  4,266
  4,475
  4,694
  4,924
  5,166
  5,421
  5,688
  5,969
  6,264
  6,574
  6,900
Issuance/(repurchase) of shares, $m
  -1,260
  526
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -7,287
  68
  1,873
  1,955
  2,042
  2,133
  2,230
  2,332
  2,439
  2,552
  2,671
  2,796
  2,928
  3,067
  3,214
  3,368
  3,530
  3,700
  3,880
  4,068
  4,266
  4,475
  4,694
  4,924
  5,166
  5,421
  5,688
  5,969
  6,264
  6,574
  6,900
Total cash flow (excl. dividends), $m
  584
  2,087
  4,097
  4,324
  4,563
  4,814
  5,079
  5,358
  5,653
  5,963
  6,289
  6,586
  6,949
  7,331
  7,734
  8,159
  8,606
  9,077
  9,574
  10,097
  10,648
  11,229
  11,840
  12,485
  13,164
  13,878
  14,631
  15,424
  16,259
  17,138
  18,064
Retained Cash Flow (-), $m
  505
  -2,445
  -208
  -217
  -227
  -237
  -248
  -259
  -271
  -284
  -297
  -311
  -325
  -341
  -357
  -374
  -392
  -411
  -431
  -452
  -474
  -497
  -522
  -547
  -574
  -602
  -632
  -663
  -696
  -730
  -767
Prev. year cash balance distribution, $m
 
  2,784
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,425
  3,889
  4,106
  4,336
  4,577
  4,831
  5,099
  5,382
  5,679
  5,992
  6,276
  6,624
  6,991
  7,377
  7,784
  8,214
  8,666
  9,143
  9,645
  10,174
  10,732
  11,319
  11,938
  12,589
  13,276
  13,999
  14,761
  15,563
  16,407
  17,297
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  2,325
  3,560
  3,574
  3,570
  3,548
  3,506
  3,445
  3,364
  3,262
  3,142
  2,980
  2,827
  2,658
  2,477
  2,285
  2,087
  1,886
  1,684
  1,485
  1,293
  1,110
  939
  782
  641
  516
  408
  317
  241
  179
  130
Current shareholders' claim on cash, %
  100
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8

Automatic Data Processing, Inc. (ADP) is a provider of human capital management (HCM) solutions to employers, offering solutions to businesses of various sizes. The Company also provides business process outsourcing solutions. Its segments include Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers a range of human resources (HR) business process outsourcing and technology-enabled HCM solutions. These offerings include payroll services, benefits administration, talent management, HR management, time and attendance management, insurance services, retirement services, and tax and compliance services. ADP TotalSource, ADP's PEO business, offers small and mid-sized businesses a HR outsourcing solution through a co-employment model. As a PEO, ADP TotalSource provides HR management services while the client continues to direct the day-to-day job-related duties of the employees.

FINANCIAL RATIOS  of  Automatic Data Processing (ADP)

Valuation Ratios
P/E Ratio 30
Price to Sales 4.2
Price to Book 13.1
Price to Tangible Book
Price to Cash Flow 24.5
Price to Free Cash Flow 31.5
Growth Rates
Sales Growth Rate 6.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 22%
Cap. Spend. - 3 Yr. Gr. Rate 9.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0.9
LT Debt to Equity 50.3%
Total Debt to Equity 50.3%
Interest Coverage 33
Management Effectiveness
Return On Assets 4.4%
Ret/ On Assets - 3 Yr. Avg. 4.3%
Return On Total Capital 27.8%
Ret/ On T. Cap. - 3 Yr. Avg. 25.2%
Return On Equity 41%
Return On Equity - 3 Yr. Avg. 32.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 48.2%
Gross Margin - 3 Yr. Avg. 48.4%
EBITDA Margin 23.6%
EBITDA Margin - 3 Yr. Avg. 22.4%
Operating Margin 20.5%
Oper. Margin - 3 Yr. Avg. 19.3%
Pre-Tax Margin 20.4%
Pre-Tax Margin - 3 Yr. Avg. 19.5%
Net Profit Margin 14%
Net Profit Margin - 3 Yr. Avg. 13.4%
Effective Tax Rate 31.5%
Eff/ Tax Rate - 3 Yr. Avg. 32.7%
Payout Ratio 57.4%

ADP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ADP stock intrinsic value calculation we used $12380 million for the last fiscal year's total revenue generated by Automatic Data Processing. The default revenue input number comes from 2017 income statement of Automatic Data Processing. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ADP stock valuation model: a) initial revenue growth rate of 5.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ADP is calculated based on our internal credit rating of Automatic Data Processing, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Automatic Data Processing.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ADP stock the variable cost ratio is equal to 56.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2965 million in the base year in the intrinsic value calculation for ADP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.9% for Automatic Data Processing.

Corporate tax rate of 27% is the nominal tax rate for Automatic Data Processing. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ADP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ADP are equal to 10.6%.

Life of production assets of 9.6 years is the average useful life of capital assets used in Automatic Data Processing operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ADP is equal to 0.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3977 million for Automatic Data Processing - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 444.406 million for Automatic Data Processing is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Automatic Data Processing at the current share price and the inputted number of shares is $52.0 billion.

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COMPANY NEWS

▶ Goldman: buy ADP   [01:40PM  CNBC Videos]
▶ Uber paid 20-year-old $10K to keep data breach secret: Reuters   [Dec-07-17 11:05AM  Yahoo Finance Video]
▶ More Private Sector Jobs For Americans   [Dec-06-17 10:16AM  Zacks]
▶ Jobs Data To Look For   [10:44AM  Zacks]
▶ 4 Stocks Billionaire Bill Ackman Is Buying and Selling   [Nov-19-17 12:15PM  Motley Fool]
▶ 3 Stocks Billionaires Own   [Nov-17-17 09:04AM  Motley Fool]
▶ ADP: Is Ackman's Loss a Win?   [01:35PM  Barrons.com]
▶ A Look At ADP After The Proxy Battle   [12:56PM  Benzinga]
▶ Ackman: I'll Be Back Next Year If ADP Doesn't Perform   [Nov-12-17 10:00AM  TheStreet.com]
▶ ADP: A Sore Winner?   [10:03AM  Barrons.com]
▶ Proxy Fights and Mystery Trusts   [09:45AM  Bloomberg]
▶ [$$] ADP Boss Taunts Ackman: This Was an Ass-Whooping   [01:16AM  The Wall Street Journal]
▶ [$$] ADP Boss Taunts Ackman: This Was a 'Whooping'   [07:21PM  The Wall Street Journal]
▶ Ackman loses ADP bid   [10:45AM  American City Business Journals]
▶ Bill Ackman Loses Bid for ADP Board Seats   [09:42AM  Investopedia]
▶ Ackman loses bid for ADP's board   [08:18AM  CNBC Videos]
Financial statements of ADP
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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