WallStSmart

Automatic Data Processing Inc (ADP)vsPaychex Inc (PAYX)

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Smart Verdict

WallStSmart Research — data-driven comparison

Automatic Data Processing Inc generates 232% more annual revenue ($21.95B vs $6.60B). PAYX leads profitability with a 27.4% profit margin vs 20.1%. PAYX appears more attractively valued with a PEG of 1.85. PAYX earns a higher WallStSmart Score of 68/100 (B-).

ADP

Buy

62

out of 100

Grade: C+

Growth: 6.0Profit: 8.0Value: 4.0Quality: 4.0
Piotroski: 2/9Altman Z: 0.53

PAYX

Strong Buy

68

out of 100

Grade: B-

Growth: 6.0Profit: 9.5Value: 5.3Quality: 4.5
Piotroski: 5/9Altman Z: 1.40
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

ADPSignificantly Overvalued (-84.1%)

Margin of Safety

-84.1%

Fair Value

$165.18

Current Price

$286.08

$120.90 premium

UndervaluedFair: $165.18Overvalued
PAYXUndervalued (+10.9%)

Margin of Safety

+10.9%

Fair Value

$106.40

Current Price

$108.21

$1.81 discount

UndervaluedFair: $106.40Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

ADP5 strengths · Avg: 8.8/10
Return on EquityProfitability
73.2%10/10

Every $100 of equity generates 73 in profit

Market CapQuality
$113.74B9/10

Large-cap with strong market position

Profit MarginProfitability
20.1%9/10

Keeps 20 of every $100 in revenue as profit

Operating MarginProfitability
23.5%8/10

Strong operational efficiency at 23.5%

Free Cash FlowQuality
$1.36B8/10

Generating 1.4B in free cash flow

PAYX3 strengths · Avg: 9.7/10
Return on EquityProfitability
48.7%10/10

Every $100 of equity generates 49 in profit

Operating MarginProfitability
38.5%10/10

Strong operational efficiency at 38.5%

Profit MarginProfitability
27.4%9/10

Keeps 27 of every $100 in revenue as profit

Areas to Watch

ADP4 concerns · Avg: 3.8/10
PEG RatioValuation
2.504/10

Expensive relative to growth rate

P/E RatioValuation
26.2x4/10

Moderate valuation

Price/BookValuation
18.9x4/10

Trading at 18.9x book value

Piotroski F-ScoreQuality
2/93/10

Weak financial health signals

PAYX4 concerns · Avg: 3.3/10
PEG RatioValuation
1.854/10

Expensive relative to growth rate

Price/BookValuation
10.4x4/10

Trading at 10.4x book value

Debt/EquityHealth
1.253/10

Elevated debt levels

Altman Z-ScoreHealth
1.402/10

Distress zone — elevated risk

Comparative Analysis Report

WallStSmart Research

Bull Case : ADP

The strongest argument for ADP centers on Return on Equity, Market Cap, Profit Margin. Profitability is solid with margins at 20.1% and operating margin at 23.5%.

Bull Case : PAYX

The strongest argument for PAYX centers on Return on Equity, Operating Margin, Profit Margin. Profitability is solid with margins at 27.4% and operating margin at 38.5%.

Bear Case : ADP

The primary concerns for ADP are PEG Ratio, P/E Ratio, Price/Book.

Bear Case : PAYX

The primary concerns for PAYX are PEG Ratio, Price/Book, Debt/Equity.

Key Dynamics to Monitor

PAYX carries more volatility with a beta of 0.85 — expect wider price swings.

ADP is growing revenue faster at 6.8% — sustainability is the question.

ADP generates stronger free cash flow (1.4B), providing more financial flexibility.

Monitor SOFTWARE - APPLICATION industry trends, competitive dynamics, and regulatory changes.

Bottom Line

PAYX scores higher overall (68/100 vs 62/100), backed by strong 27.4% 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.

Paychex Inc

TECHNOLOGY · SOFTWARE - APPLICATION · USA

Paychex, Inc. is an American provider of human resource, payroll, and benefits outsourcing services for small- to medium-sized businesses.

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