ADP Stock Forecast & Price Target

Automatic Data Processing is supported by a durable, recurring-revenue model anchored in payroll, compliance, and benefits infrastructure that is difficult to replicate, with over 1.1 million clients and payroll for more than 42 million workers across 140 countries. The outlook is strengthened by expected FY27 Employer Services growth of roughly 5%-6%, with modest 2H upside from enterprise go-lives, Lyric, and the new benefits enrollment initiative that could pull January starts forward into revenue recognition sooner. PEO also provides incremental support through healthcare-cost and wage-growth tailwinds, while AI-driven service and implementation efficiencies offer a further path to margin expansion and earnings upside.

Automatic Data Processing is facing a less favorable setup in PEO, where growth that has held around 6-7% may slow as FY27 headwinds build. The majority of PEO customers renew in F4Q, but outsized healthcare inflation of +9% could pressure mix, retention, and SMB benefit spend, while management already noted softer same-store hiring. With modeled FY27 PEO growth of 5.5% versus 6.6% in FY26 and below consensus of 6.1%, the outlook implies muted bookings, flat hiring conditions, and modest retention decline.