Automatic Data Processing Inc (ADP)vsGuidewire Software Inc (GWRE)
ADP
Automatic Data Processing Inc
$263.87
-3.48%
TECHNOLOGY · Cap: $97.18B
GWRE
Guidewire Software Inc
$167.26
+4.93%
TECHNOLOGY · Cap: $12.49B
Smart Verdict
WallStSmart Research — data-driven comparison
Automatic Data Processing Inc generates 1420% more annual revenue ($21.60B vs $1.42B). ADP leads profitability with a 20.1% profit margin vs 11.3%. GWRE appears more attractively valued with a PEG of 0.82. ADP earns a higher WallStSmart Score of 66/100 (B-).
ADP
Strong Buy66
out of 100
Grade: B-
GWRE
Buy50
out of 100
Grade: C-
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-60.5%
Fair Value
$158.82
Current Price
$263.87
$105.05 premium
Margin of Safety
+13.2%
Fair Value
$150.26
Current Price
$167.26
$17.00 discount
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Every $100 of equity generates 68 in profit
Strong operational efficiency at 30.2%
Large-cap with strong market position
Keeps 20 of every $100 in revenue as profit
Generating 2.0B in free cash flow
Growing faster than its price suggests
Revenue surging 26.9% year-over-year
Areas to Watch
Expensive relative to growth rate
Trading at 16.6x book value
Distress zone — elevated risk
Trading at 10.6x book value
Premium valuation, high expectations priced in
Earnings declined 64.8%
Negative free cash flow — burning cash
Comparative Analysis Report
WallStSmart ResearchBull Case : ADP
The strongest argument for ADP centers on Return on Equity, Operating Margin, Market Cap. Profitability is solid with margins at 20.1% and operating margin at 30.2%.
Bull Case : GWRE
The strongest argument for GWRE centers on PEG Ratio, Revenue Growth. Revenue growth of 26.9% demonstrates continued momentum. PEG of 0.82 suggests the stock is reasonably priced for its growth.
Bear Case : ADP
The primary concerns for ADP are PEG Ratio, Price/Book, Altman Z-Score.
Bear Case : GWRE
The primary concerns for GWRE are Price/Book, P/E Ratio, EPS Growth. A P/E of 80.7x leaves little room for execution misses.
Key Dynamics to Monitor
ADP profiles as a mature stock while GWRE is a growth play — different risk/reward profiles.
GWRE carries more volatility with a beta of 0.95 — expect wider price swings.
GWRE is growing revenue faster at 26.9% — sustainability is the question.
ADP generates stronger free cash flow (2.0B), providing more financial flexibility.
Bottom Line
ADP scores higher overall (66/100 vs 50/100), backed by strong 20.1% margins. Both earn "Strong Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Automatic Data Processing Inc
TECHNOLOGY · SOFTWARE - APPLICATION · USA
Automatic Data Processing, Inc. (ADP) is an American provider of human resources management software and services.
Guidewire Software Inc
TECHNOLOGY · SOFTWARE - APPLICATION · USA
Guidewire Software, Inc. provides software products for property and casualty insurers around the world. The company is headquartered in San Mateo, California.
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