Price to Earnings (P/E)
since 2005
Calculation
Automatic Data Processing Inc., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net earnings1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Aug 4, 2021 | 34.52 | = | 212.00 | ÷ | 6.14 | 6.14 | = | 2,598,500 | ÷ | 423,080,556 | |
| Aug 5, 2020 | 23.49 | = | 134.77 | ÷ | 5.74 | 5.74 | = | 2,466,500 | ÷ | 429,965,405 | |
| Aug 9, 2019 | 31.75 | = | 167.73 | ÷ | 5.28 | 5.28 | = | 2,292,800 | ÷ | 433,942,837 | |
| Aug 3, 2018 | 36.29 | = | 134.25 | ÷ | 3.70 | 3.70 | = | 1,620,800 | ÷ | 438,082,756 | |
| Aug 4, 2017 | 28.56 | = | 111.39 | ÷ | 3.90 | 3.90 | = | 1,733,400 | ÷ | 444,374,752 | |
| Aug 5, 2016 | 27.41 | = | 89.67 | ÷ | 3.27 | 3.27 | = | 1,492,500 | ÷ | 456,176,951 | |
| Aug 7, 2015 | 25.75 | = | 80.29 | ÷ | 3.12 | 3.12 | = | 1,452,500 | ÷ | 465,810,128 | |
| Aug 8, 2014 | 25.73 | = | 81.12 | ÷ | 3.15 | 3.15 | = | 1,515,900 | ÷ | 480,912,107 | |
| Aug 19, 2013 | 24.69 | = | 71.90 | ÷ | 2.91 | 2.91 | = | 1,405,800 | ÷ | 482,823,076 | |
| Aug 20, 2012 | 20.36 | = | 58.36 | ÷ | 2.87 | 2.87 | = | 1,388,500 | ÷ | 484,504,817 | |
| Aug 24, 2011 | 19.04 | = | 48.76 | ÷ | 2.56 | 2.56 | = | 1,254,200 | ÷ | 489,677,633 | |
| Aug 25, 2010 | 15.81 | = | 38.93 | ÷ | 2.46 | 2.46 | = | 1,211,400 | ÷ | 492,022,525 | |
| Aug 28, 2009 | 14.53 | = | 38.56 | ÷ | 2.65 | 2.65 | = | 1,332,600 | ÷ | 502,151,920 | |
| Aug 29, 2008 | 18.28 | = | 44.38 | ÷ | 2.43 | 2.43 | = | 1,235,700 | ÷ | 508,864,299 | |
| Aug 29, 2007 | 21.61 | = | 46.33 | ÷ | 2.14 | 2.14 | = | 1,138,700 | ÷ | 531,060,120 | |
| Aug 30, 2006 | 16.95 | = | 47.41 | ÷ | 2.80 | 2.80 | = | 1,554,000 | ÷ | 555,570,420 | |
| Aug 31, 2005 | 23.43 | = | 42.75 | ÷ | 1.82 | 1.82 | = | 1,055,400 | ÷ | 578,425,694 |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Automatic Data Processing Inc. Annual Report.
The long-term financial trajectory from 2005 to 2021 is characterized by a substantial increase in both share price and earnings per share, accompanied by a general expansion of the price-to-earnings (P/E) multiple. While the share price grew from 42.75 to 212.00 and earnings per share rose from 1.82 to 6.14, the P/E ratio experienced distinct phases of compression, steady growth, and volatility.
- Valuation Compression and Bottoming (2005–2009)
- A period of valuation contraction is observed between 2005 and 2009. The P/E ratio declined from 23.43 in 2005 to a minimum of 14.53 in 2009. This decline occurred despite earnings per share remaining relatively stable, suggesting a reduction in market sentiment or a broader systemic devaluation of equity multiples during this timeframe.
- Sustained Multiple Expansion (2010–2018)
- Starting in 2010, a consistent upward trend in the P/E ratio is evident, rising from 15.81 to a peak of 36.29 in 2018. This expansion indicates that investors were willing to pay an increasing premium for each dollar of earnings. During this interval, the share price grew more rapidly than the earnings per share, driving the valuation multiple higher.
- Recent Volatility and Recovery (2019–2021)
- The period between 2019 and 2021 shows significant fluctuation. A contraction in the P/E ratio occurred in 2020, falling to 23.49, which coincided with a decrease in share price from 167.73 in 2019 to 134.77 in 2020. However, a sharp recovery followed in 2021, with the P/E ratio climbing to 34.52, driven by a substantial surge in share price to 212.00.
- Earnings Growth Correlation
- Earnings per share demonstrated a steady upward trajectory, particularly after 2016, moving from 3.27 in 2016 to 6.14 in 2021. The fact that the P/E ratio expanded even as earnings grew suggests strong market confidence in the sustainability and future growth potential of the earnings stream.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Comparison to Competitors
Automatic Data Processing Inc., P/E, long-term trends, comparison to competitors
| Automatic Data Processing Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Aug 4, 2021 | 34.52 | 36.58 | 48.90 | 472.35 | 53.88 | — | 19.40 | 75.17 | 35.14 | 15.84 | — | — | 48.20 | 487.70 | 73.37 | — |
| Aug 5, 2020 | 23.49 | 28.32 | 41.69 | — | 62.89 | — | 19.30 | 49.52 | 35.04 | 16.69 | — | — | 1,204.70 | 978.49 | 55.92 | — |
| Aug 9, 2019 | 31.75 | 24.58 | 57.17 | — | 20.22 | — | 13.35 | 48.17 | 26.86 | 16.89 | — | — | 107.70 | 106.89 | 39.55 | — |
| Aug 3, 2018 | 36.29 | 24.10 | 46.11 | — | 46.59 | — | 14.25 | 46.88 | 50.00 | 45.90 | — | — | 731.11 | — | 29.60 | — |
| Aug 4, 2017 | 28.56 | 26.18 | 57.41 | — | 55.67 | — | 25.07 | 37.26 | 26.25 | 22.49 | — | — | 324.94 | — | 95.81 | — |
| Aug 5, 2016 | 27.41 | 18.07 | 46.80 | — | 40.53 | — | 14.29 | 29.60 | 26.08 | 18.53 | — | — | — | — | 33.71 | — |
| Aug 7, 2015 | 25.75 | 22.75 | 70.59 | — | 25.14 | — | 9.65 | 63.89 | 30.63 | 17.92 | — | — | — | — | 30.45 | — |
| Aug 8, 2014 | 25.73 | 17.46 | 132.73 | — | 34.03 | — | 13.55 | 26.44 | 16.11 | 16.33 | — | — | — | — | 25.00 | — |
| Aug 19, 2013 | 24.69 | 15.20 | 104.21 | — | 26.30 | — | 11.58 | 21.73 | 12.14 | 12.78 | — | — | — | — | 24.68 | — |
| Aug 20, 2012 | 20.36 | 17.95 | 22.73 | — | 9.11 | — | 13.37 | 22.37 | 14.40 | 13.61 | — | 6,057.94 | — | — | 26.53 | — |
| Aug 24, 2011 | 19.04 | 17.60 | 18.49 | — | 44.80 | — | 14.47 | 22.53 | 10.03 | 19.17 | — | — | 251.73 | — | 17.51 | — |
| Aug 25, 2010 | 15.81 | 17.62 | 22.05 | — | 20.39 | — | 13.32 | 24.82 | 11.91 | 17.66 | — | — | 118.88 | — | 17.09 | — |
| Aug 28, 2009 | 14.53 | 17.45 | 46.62 | — | — | — | 12.24 | 20.01 | 14.56 | 19.25 | — | — | 87.39 | — | 18.86 | — |
| Aug 29, 2008 | 18.28 | 13.74 | 11.84 | — | — | — | 9.40 | 20.68 | 13.28 | 19.44 | — | — | 388.13 | — | 13.55 | — |
| Aug 29, 2007 | 21.61 | 24.38 | 27.23 | — | 10.43 | — | 15.20 | 21.92 | 74.58 | 23.58 | — | — | 10,271.10 | — | 29.39 | — |
| Aug 30, 2006 | 16.95 | 26.95 | 44.72 | — | 41.15 | — | 14.90 | 27.35 | 63.21 | 23.43 | — | — | 151.60 | — | 156.86 | — |
| Aug 31, 2005 | 23.43 | 24.06 | 38.61 | — | 103.88 | — | 15.85 | 21.02 | 70.27 | 23.70 | — | — | 207.38 | — | — | — |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Sector (Software & Services)
Automatic Data Processing Inc., P/E, long-term trends, comparison to sector (software & services)
| Automatic Data Processing Inc. | Software & Services | |
|---|---|---|
| Aug 4, 2021 | 34.52 | 37.62 |
| Aug 5, 2020 | 23.49 | 38.46 |
| Aug 9, 2019 | 31.75 | 28.30 |
| Aug 3, 2018 | 36.29 | 43.31 |
| Aug 4, 2017 | 28.56 | 30.27 |
| Aug 5, 2016 | 27.41 | 23.96 |
| Aug 7, 2015 | 25.75 | 23.38 |
| Aug 8, 2014 | 25.73 | 18.36 |
| Aug 19, 2013 | 24.69 | 14.09 |
| Aug 20, 2012 | 20.36 | 14.97 |
| Aug 24, 2011 | 19.04 | 13.91 |
| Aug 25, 2010 | 15.81 | 14.04 |
| Aug 28, 2009 | 14.53 | 15.17 |
| Aug 29, 2008 | 18.28 | 13.87 |
| Aug 29, 2007 | 21.61 | 43.67 |
| Aug 30, 2006 | 16.95 | 39.59 |
| Aug 31, 2005 | 23.43 | 44.69 |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Industry (Information Technology)
Automatic Data Processing Inc., P/E, long-term trends, comparison to industry (information technology)
| Automatic Data Processing Inc. | Information Technology | |
|---|---|---|
| Aug 4, 2021 | 34.52 | 29.75 |
| Aug 5, 2020 | 23.49 | 30.97 |
| Aug 9, 2019 | 31.75 | 23.40 |
| Aug 3, 2018 | 36.29 | 23.17 |
| Aug 4, 2017 | 28.56 | 23.55 |
| Aug 5, 2016 | 27.41 | 19.69 |
| Aug 7, 2015 | 25.75 | 16.54 |
| Aug 8, 2014 | 25.73 | 17.14 |
| Aug 19, 2013 | 24.69 | 14.15 |
| Aug 20, 2012 | 20.36 | 14.37 |
| Aug 24, 2011 | 19.04 | 13.71 |
| Aug 25, 2010 | 15.81 | 15.08 |
| Aug 28, 2009 | 14.53 | 21.50 |
| Aug 29, 2008 | 18.28 | 15.83 |
| Aug 29, 2007 | 21.61 | 36.48 |
| Aug 30, 2006 | 16.95 | 32.07 |
| Aug 31, 2005 | 23.43 | 33.76 |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).