Automatic Data Processing Inc (ADP)vsPegasystems Inc (PEGA)
ADP
Automatic Data Processing Inc
$286.08
+0.25%
TECHNOLOGY · Cap: $113.74B
PEGA
Pegasystems Inc
$35.37
+0.14%
TECHNOLOGY · Cap: $5.58B
Smart Verdict
WallStSmart Research — data-driven comparison
Automatic Data Processing Inc generates 1164% more annual revenue ($21.95B vs $1.74B). ADP leads profitability with a 20.1% profit margin vs 18.7%. ADP appears more attractively valued with a PEG of 2.50. ADP earns a higher WallStSmart Score of 62/100 (C+).
ADP
Buy62
out of 100
Grade: C+
PEGA
Hold48
out of 100
Grade: D+
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-84.1%
Fair Value
$165.18
Current Price
$286.08
$120.90 premium
Margin of Safety
+60.7%
Fair Value
$96.57
Current Price
$35.37
$61.20 discount
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Every $100 of equity generates 73 in profit
Large-cap with strong market position
Keeps 20 of every $100 in revenue as profit
Strong operational efficiency at 23.5%
Generating 1.4B in free cash flow
Every $100 of equity generates 48 in profit
Conservative balance sheet, low leverage
Areas to Watch
Expensive relative to growth rate
Moderate valuation
Trading at 18.9x book value
Weak financial health signals
Trading at 10.4x book value
Operating margin of 4.6%
Expensive relative to growth rate
Earnings declined 52.9%
Comparative Analysis Report
WallStSmart ResearchBull 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 : PEGA
The strongest argument for PEGA centers on Return on Equity, Debt/Equity. Profitability is solid with margins at 18.7% and operating margin at 4.6%.
Bear Case : ADP
The primary concerns for ADP are PEG Ratio, P/E Ratio, Price/Book.
Bear Case : PEGA
The primary concerns for PEGA are Price/Book, Operating Margin, PEG Ratio.
Key Dynamics to Monitor
PEGA carries more volatility with a beta of 0.89 — expect wider price swings.
PEGA is growing revenue faster at 9.4% — 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
ADP scores higher overall (62/100 vs 48/100), backed by strong 20.1% margins. PEGA offers better value entry with a 60.7% margin of safety. Both earn "Buy" and "Hold" 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.
Pegasystems Inc
TECHNOLOGY · SOFTWARE - APPLICATION · USA
Pegasystems Inc. develops, markets, licenses, hosts and supports business software applications in the United States, the rest of the Americas, the United Kingdom, the rest of Europe, the Middle East, Africa, and Asia-Pacific. The company is headquartered in Cambridge, Massachusetts.
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