What is Automatic Data Processing, Inc. (ADP)'s PEG ratio?

Automatic Data Processing, Inc. (ADP) has a PEG ratio of 2.01 (Potentially Overvalued), based on a PE ratio of 23.8 and expected EPS growth of 11.8% (5-Year EPS CAGR).

Is ADP undervalued based on its PEG ratio?

A PEG below 1.0 is conventionally read as potentially undervalued, 1.0–2.0 as fairly valued, and above 2.0 as potentially overvalued relative to growth. At 2.01, Automatic Data Processing, Inc. (ADP) screens as "Potentially Overvalued". PEG is one signal, not investment advice — see the full DCF fair value at evidinvest.com/valuation/ADP.

Automatic Data Processing, Inc. (ADP) PEG Ratio

Potentially Overvalued

PE ratio relative to earnings growth — is the valuation justified?

2.01

PEG Ratio

2.01

Growth Rate Source

Good Data Quality5-Year EPS CAGR

Current Price

$254.98

TTM EPS

$10.73

P/E Ratio

23.76

Growth Rate

11.8%

5-Year EPS CAGR

Sector

Technology

Software - Application

Calculated

7/28/2026

7:28:19 PM

Peer Comparison

Sample Size

4 peers

Industry Median PEG

2.59

25th Percentile

2.47

75th Percentile

7.60

ADP PEG (2.01) vs Industry Median (2.59): 22% discount

Symbol	Company	PEG	P/E	Growth	vs ADP
PAYX	Paychex, Inc.	2.38	23.7	9.9%	+18%
BDX	Becton, Dickinson and Company	2.47	40.2	16.3%	+23%
ITW	Illinois Tool Works Inc.	2.70	25.8	9.6%	+34%
EMR	Emerson Electric Co.	7.60	34.5	4.5%	+278%

How to Interpret PEG Ratio

PEG < 1.0 — Potentially Undervalued. The stock may be priced below its earnings growth rate, suggesting a potential buying opportunity.

PEG 1.0–2.0 — Fairly Valued. The stock price is roughly in line with its earnings growth. A PEG of 1.0 is often considered "fair value."

PEG > 2.0 — Potentially Overvalued. The stock may be priced above what its earnings growth justifies.

Limitations:PEG ratios are less reliable for financial firms (earnings driven by interest margins), companies with negative/zero earnings growth, and hypergrowth companies (>100% growth) where the ratio may appear misleadingly low. Always use PEG alongside other valuation metrics.

Automatic Data Processing, Inc. (ADP) PEG Ratio

Peer Comparison

How to Interpret PEG Ratio

More on ADP

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Automatic Data Processing, Inc. (ADP) PEG Ratio

Peer Comparison

How to Interpret PEG Ratio

More on ADP

Compare with peers

Explore