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ADP shares reflect raised 2026 outlook after strong quarterly results
ADP reported fiscal third-quarter revenue of $5.94 billion, up 7% year over year, and raised its fiscal 2026 outlook for revenue growth to 6% to 7%.
Automatic Data Processing, Inc. is trading around the mid-$250s after reporting fiscal third-quarter results that the company linked to higher full-year expectations, according to a Yahoo Finance article discussing the stock's outlook versus peers.
ADP said fiscal third-quarter revenue rose 7% year over year to $5.94 billion, with adjusted diluted EPS up 10% to $3.37. The article also notes client-funds interest increased, rising to $403.9 million from $355.2 million a year earlier, as average balances grew 8.5% to $48.3 billion and the portfolio yield edged up to 3.3%.
The company pointed to margin progress as well, with adjusted EBIT margin reaching 30.2% and Employer Services margin expanding 130 basis points to 41.1%. ADP raised its fiscal 2026 outlook to 6% to 7% revenue growth and 10% to 11% adjusted EPS growth.
The article frames valuation as a key question for investors, noting ADP shares were above an original $250 bull target at the time cited and were trading at roughly 23.7 times trailing earnings, leaving less room for the outcome to match the prior thesis. It also highlights ADP's payroll services as compliance-critical with recurring revenue and high switching costs, and cites ADP's scale across more than one million clients as a potential advantage for automation use cases.