• Jefferies maintains an "Underperform" rating for ADP, citing high valuation and mid single-digit growth concerns.
• ADP's Q2 2026 earnings reveal a 6.2% increase in revenue but face challenges from slowing employment growth.
• The company's stock price slightly decreased, with a current valuation of $254.28, amidst a volatile trading range.

Automatic Data Processing, Inc. (NASDAQ:ADP) is a prominent player in the human resources and payroll services industry. The company provides a range of services, including payroll processing, tax and benefits administration, and human capital management solutions. ADP competes with other major firms like Paychex and Workday in delivering these essential services to businesses worldwide.

On January 28, 2026, Jefferies maintained its "Underperform" rating for ADP, with a hold recommendation at a stock price of $254.55. Jefferies expressed skepticism about the potential of ADP's Q2 report to boost its share price, as highlighted by TheFly. This sentiment aligns with the current "Sell" recommendation due to ADP's high valuation of 22 times earnings, which seems excessive given its mid single-digit growth.

ADP's recent financial results show a 6% increase in revenue and margin expansion. However, the company faces challenges from slowing employment growth and demographic trends. Despite these hurdles, ADP's Q2 2026 earnings call, available on Seeking Alpha, provides valuable insights into its financial performance and strategic direction, which are crucial for investors and stakeholders.

For the quarter ending December 2025, ADP reported a revenue of $5.36 billion, a 6.2% increase from the previous year. However, this fell short of the Zacks Consensus Estimate of $5.38 billion, resulting in a negative surprise of 0.47%. On the earnings side, ADP's EPS of $2.62 surpassed the consensus estimate of $2.58, reflecting a positive surprise of 1.62% and growth from the previous year's $2.35.

ADP's current stock price is $254.28, a slight decrease of 0.09% or $0.23. The stock has traded between $248.30 and $255.73 today, with a 52-week high of $329.93 and a low of $247.18. The company's market capitalization is approximately $102.8 billion, with a trading volume of 1,945,350 shares on the NASDAQ exchange.