Discounted Cash Flow

Automatic Data Processing Inc.

ADP · Based on 10 years of SEC filings

Average annual growth rates

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Average annual growth is the mean year-over-year change across each period.

Endpoint CAGR (better for long term trend)

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Endpoint CAGR is the compound annual rate from the first to last year in each period.

Projections use average year-over-year growth. Change this in Settings.

Projected growth rate

Free cash flow growth
10-year: — 5-year: — 3-year: —
Averaged growth (FCF & NI)
10-year: — 5-year: — 3-year: —
Net income growth
10-year: — 5-year: — 3-year: —
Sales growth (not added to calculations)
10-year: — 5-year: — 3-year: —

Click a greyed-out slider to switch metrics. Slide between the 10-year, 5-year, and 3-year historic growth rates for FCF, net income, or their average.

%
%

Historical inputs (10 fiscal years)

YEAR Sales Net Income Free Cash Flow Net Margin EPS (diluted)
2016 $8.2b $1.5b $1.7b 18.1% $3.27
2017 $8.5b (3.5%) $1.7b (16.1%) $1.9b (11.5%) 20.3% (12.3%) $3.87 (18.3%)
2018 $9.0b (5.5%) $1.6b (-6.5%) $2.3b (22.5%) 18.0% (-11.4%) $3.68 (-4.9%)
2019 $14.2b (57.8%) $2.3b (41.5%) $2.5b (9.4%) 16.2% (-10.3%) $5.27 (43.2%)
2020 $14.6b (2.9%) $2.5b (7.6%) $2.9b (13.0%) 16.9% (4.5%) $5.73 (8.7%)
2021 $15.0b (2.8%) $2.6b (5.4%) $2.9b (2.1%) 17.3% (2.4%) $6.10 (6.5%)
2022 $16.5b (9.9%) $2.9b (13.5%) $2.5b (-12.6%) 17.9% (3.2%) $7.04 (15.4%)
2023 $18.0b (9.2%) $3.4b (15.7%) $3.6b (42.8%) 18.9% (6.0%) $8.25 (17.2%)
2024 $19.2b (6.6%) $3.8b (10.0%) $3.6b (-1.1%) 19.5% (3.1%) $9.14 (10.8%)
2025 $20.6b (7.1%) $4.1b (8.7%) $4.4b (22.2%) 19.8% (1.6%) $10.02 (9.6%)

Base FCF: (latest fiscal year)

Discount rate: %

Terminal growth:

Projection period: years

Alt A decline yrs:

Alt B total yrs:

Values abbreviated: b = billions, m = millions, k = thousands.

Projected cash flows

Year Projected cash flow Discount Factor Present Value

PV of projected FCF:

Terminal FCF:

Terminal value:

PV of terminal value:

Enterprise value (DCF):

DCF price per share:

Current price:

Alternative DCF Models

Model Fair Value Upside PV(FCFs) PV(Terminal) Total Years
Standard (10yr→TV) 10 + TV
Alt A (Gradual Decline)
Alt B (30yr Hard Stop) N/A

This is a simplified DCF model for illustration. It uses reported free cash flow, a single growth assumption, fixed WACC, and a Gordon Growth terminal value. It is not investment advice.

+ 10YR Financials Balance Sheet (10YR) Cash Flow (10YR) DCF Model