Bullish ADP thesis by danielcharts

ADP - Automatic Data Processing Inc - Industrials

That ADP nosedive over the past year has been pretty wild. Just last summer it was hanging out around 320, and here we are at 225.31. The drop from fall into early spring was brutal (saw it dip under 200 at one point), and while there’s been a little bounce lately, it still feels like the dust hasn’t totally settled. So yeah, I’m bullish from here, but this is definitely a more medium risk shot for me.

There’s real value to be had with ADP at these levels. The company’s core business payroll and HR software is still sticky as hell. Churn stays low because once companies are plugged in, it’s not worth the pain to switch. Plus, as labor markets stay tight, employers keep spending on these platforms to stay compliant and organized. Not flashy, but steady. I’m also thinking the recent cost cutting and automation pushes are going to start showing up in margins over the next few quarters.

If they get any positive surprises out of client adds or guide higher on their next earnings call, the stock should climb back toward 260.00. That’s my target price. It’s not back to former highs, but it’s a decent recovery, and I don’t see the old support around 200 breaking without a macro shock. The main risk? Corporate budgets are slimming down if there’s a true recession and companies tighten up even more, you could see deal delays or a squeeze on ADP’s pricing power. That would drag out the recovery a lot longer.

Earnings next quarter are the big one to watch. If management sounds upbeat or books show stabilization, I think we finally get a break in the negative sentiment. Until then, just gotta stay patient with this one. Anyone else holding through the chop?

Bullish

Created May 23, 2026

Community vote

Entry Price

$225.31

Above

$260.00

Target Date

Sep 12, 2026

Karma

114 to 16457

Above target (win)Projection

Comments

May 27, 2026 · 13:24

Not gonna lie, catching ADP after it got absolutely smoked has some guts. Payroll’s steady but it’s not like the market forgot it exists overnight. If this thing even sniffs a rerate back to pre plunge levels, you’re right, there’s upside. Just hope you’re cool waiting for Wall Street’s amnesia to set in.

May 28, 2026 · 22:04

Honestly, I mostly agree with that. Payroll’s not the sexiest line of business but ADP’s cashflow is hard to argue with. I get the risk angle though the chart still looks rough and nobody seems in a rush to pay a premium for “safe” when growth is hot elsewhere. I’m okay sitting on it for a while, but I’m not betting the farm.

May 29, 2026 · 14:15

Totally hear you on the dust not being settled yet. I like ADP long term, but when a stock loses that much ground, it doesn't just bounce back like nothing happened. The cashflow’s solid but the valuation could still compress more if the economy slows. I’m watching it too, just not diving in headfirst yet.

May 30, 2026 · 14:55

If you’re not buying ADP here, when are you ever gonna have the balls to step in? Sure it got killed, but the company’s not going anywhere. Everyone’s acting like payroll is about to evaporate. Settle down, grab the discount, and wait.