Automatic Data Processing, Inc. (NASDAQ:ADP) is one of the Profitable SaaS Companies for 2026. Wall Street has a mixed opinion on Automatic Data Processing, Inc. (NASDAQ:ADP) since the release of its fiscal Q2 2026 results on January 28.
Recently, on February 9, David Grossman from Stifel Nicolaus reiterated a Hold rating on the stock and lowered the price target from $280 to $270. Earlier on January 28, BMO Capital also lowered the price target from $288 to $281, while maintaining a Market Perform rating on the stock.
The cautious rating comes despite Automatic Data Processing, Inc. (NASDAQ:ADP) exceeding estimates in fiscal Q2 2026. The company posted a revenue of $5.36 billion, reflecting 6.16% year-over-year increase and ahead of expectations by $21 million. Moreover, the EPS of $2.62 also topped estimates by $0.05. Management attributed the performance to strong business bookings growth and progress on its strategic priorities.
Analysts at Stifel Nicolaus noted that the reduced price target reflects a reassessment amid AI-related factors, but they still see value in the stock. Automatic Data Processing, Inc. (NASDAQ:ADP) trades at a 17% premium to the equal-weight S&P 500. The analyst noted that this is the lowest since the financial crisis compared to its historical 50%-60% range. Stifel Nicolaus finds this a compelling risk/reward profile for the company.
Automatic Data Processing, Inc. (NASDAQ:ADP) provides cloud-based human capital management (HCM) solutions worldwide, focusing on payroll processing, HR outsourcing, and related services.
While we acknowledge the potential of ADP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
