Price to Sales (P/S)
since 2005
Calculation
Automatic Data Processing Inc., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Revenues1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Aug 4, 2021 | 5.98 | = | 212.00 | ÷ | 35.47 | 35.47 | = | 15,005,400 | ÷ | 423,080,556 | |
| Aug 5, 2020 | 3.97 | = | 134.77 | ÷ | 33.93 | 33.93 | = | 14,589,800 | ÷ | 429,965,405 | |
| Aug 9, 2019 | 5.13 | = | 167.73 | ÷ | 32.67 | 32.67 | = | 14,175,200 | ÷ | 433,942,837 | |
| Aug 3, 2018 | 4.41 | = | 134.25 | ÷ | 30.42 | 30.42 | = | 13,325,800 | ÷ | 438,082,756 | |
| Aug 4, 2017 | 4.00 | = | 111.39 | ÷ | 27.86 | 27.86 | = | 12,379,800 | ÷ | 444,374,752 | |
| Aug 5, 2016 | 3.51 | = | 89.67 | ÷ | 25.58 | 25.58 | = | 11,667,800 | ÷ | 456,176,951 | |
| Aug 7, 2015 | 3.42 | = | 80.29 | ÷ | 23.48 | 23.48 | = | 10,938,500 | ÷ | 465,810,128 | |
| Aug 8, 2014 | 3.20 | = | 81.12 | ÷ | 25.38 | 25.38 | = | 12,206,500 | ÷ | 480,912,107 | |
| Aug 19, 2013 | 3.07 | = | 71.90 | ÷ | 23.42 | 23.42 | = | 11,310,100 | ÷ | 482,823,076 | |
| Aug 20, 2012 | 2.65 | = | 58.36 | ÷ | 22.01 | 22.01 | = | 10,665,200 | ÷ | 484,504,817 | |
| Aug 24, 2011 | 2.42 | = | 48.76 | ÷ | 20.18 | 20.18 | = | 9,879,500 | ÷ | 489,677,633 | |
| Aug 25, 2010 | 2.15 | = | 38.93 | ÷ | 18.14 | 18.14 | = | 8,927,700 | ÷ | 492,022,525 | |
| Aug 28, 2009 | 2.18 | = | 38.56 | ÷ | 17.66 | 17.66 | = | 8,867,100 | ÷ | 502,151,920 | |
| Aug 29, 2008 | 2.57 | = | 44.38 | ÷ | 17.25 | 17.25 | = | 8,776,500 | ÷ | 508,864,299 | |
| Aug 29, 2007 | 3.15 | = | 46.33 | ÷ | 14.69 | 14.69 | = | 7,800,000 | ÷ | 531,060,120 | |
| Aug 30, 2006 | 2.97 | = | 47.41 | ÷ | 15.99 | 15.99 | = | 8,881,500 | ÷ | 555,570,420 | |
| Aug 31, 2005 | 2.91 | = | 42.75 | ÷ | 14.69 | 14.69 | = | 8,499,100 | ÷ | 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 price-to-sales (P/S) ratio exhibits a long-term upward trajectory from 2005 to 2021, increasing from 2.91 to 5.98. While sales per share grew consistently over this period, the acceleration in share price drove the expansion of the valuation multiple.
- Early Period and Financial Crisis Impact
- Between 2005 and 2007, the P/S ratio remained relatively stable, peaking at 3.15. A subsequent contraction is observed between 2008 and 2010, with the ratio reaching a low of 2.15. This decline occurred despite sales per share increasing from 17.25 to 18.14, indicating that the decrease in share price during the global financial crisis was the primary driver of the ratio's compression.
- Growth and Multiple Expansion Phase
- From 2011 through 2019, a sustained period of valuation expansion is evident. The P/S ratio climbed steadily from 2.42 to 5.13. This trend highlights a divergence where the share price grew at a significantly faster rate than the underlying revenue per share, suggesting an increase in the market's valuation premium for the company's revenue generation.
- Recent Volatility and Peak Valuation
- A notable fluctuation occurred in 2020, with the P/S ratio dropping to 3.97, coinciding with a decrease in share price. However, 2021 saw a sharp rebound to 5.98, the highest ratio in the analyzed period. This spike was driven by the share price reaching a peak of 212.00, significantly outpacing the growth in sales per share, which stood at 35.47.
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Comparison to Competitors
Automatic Data Processing Inc., P/S, 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 | 5.98 | 4.28 | 14.94 | 5.99 | 12.55 | 49.25 | 1.94 | 16.09 | 12.81 | 5.38 | 15.58 | 10.72 | 9.24 | 19.02 | 13.22 | 13.95 |
| Aug 5, 2020 | 3.97 | 3.26 | 17.04 | — | 13.85 | 49.57 | 1.47 | 11.78 | 10.85 | 4.33 | 39.86 | 6.66 | 8.88 | 25.66 | 10.08 | 10.65 |
| Aug 9, 2019 | 5.13 | 2.72 | 15.11 | — | 8.56 | 36.28 | 1.63 | 11.05 | 8.38 | 4.74 | — | 7.06 | 9.00 | 19.36 | 6.27 | 14.75 |
| Aug 3, 2018 | 4.41 | 2.35 | 13.23 | — | 7.53 | — | 1.56 | 9.52 | 7.51 | 4.41 | — | 9.75 | 8.89 | 16.63 | 4.10 | 13.73 |
| Aug 4, 2017 | 4.00 | 2.45 | 13.32 | — | 5.85 | — | 1.82 | 6.99 | 6.19 | 5.56 | — | 7.49 | 6.96 | 14.55 | 4.80 | 11.06 |
| Aug 5, 2016 | 3.51 | 2.13 | 9.34 | — | 4.53 | — | 2.12 | 6.17 | 5.13 | 4.45 | — | 9.69 | 7.09 | 10.50 | 3.71 | 12.08 |
| Aug 7, 2015 | 3.42 | 2.11 | 9.27 | — | 3.73 | — | 1.56 | 5.56 | 3.99 | 4.66 | — | 16.88 | 7.82 | 8.69 | 3.07 | 19.97 |
| Aug 8, 2014 | 3.20 | 1.61 | 8.59 | — | 3.42 | — | 1.76 | 5.32 | 4.10 | 4.67 | — | 13.17 | 9.54 | 16.81 | 3.15 | 35.87 |
| Aug 19, 2013 | 3.07 | 1.64 | 7.45 | — | 2.96 | — | 1.91 | 4.47 | 3.41 | 3.75 | — | 8.38 | 8.92 | 22.61 | 3.12 | 37.91 |
| Aug 20, 2012 | 2.65 | 1.54 | 4.30 | — | 3.02 | — | 2.12 | 4.27 | 3.32 | 3.66 | — | 17.50 | 8.91 | 19.84 | 2.76 | — |
| Aug 24, 2011 | 2.42 | 1.47 | 3.65 | — | 2.81 | — | 2.15 | 3.71 | 3.32 | 4.60 | — | — | 9.79 | — | 2.52 | — |
| Aug 25, 2010 | 2.15 | 1.36 | 4.50 | — | 2.76 | — | 1.98 | 4.12 | 3.57 | 4.04 | — | — | 7.35 | — | 2.93 | — |
| Aug 28, 2009 | 2.18 | 1.20 | 6.12 | — | 1.81 | — | 1.72 | 2.81 | 3.63 | 4.63 | — | — | 3.52 | — | 2.33 | — |
| Aug 29, 2008 | 2.57 | 0.92 | 2.88 | — | 1.01 | — | 1.12 | 3.21 | 3.89 | 4.79 | — | — | 9.52 | — | 1.93 | — |
| Aug 29, 2007 | 3.15 | 1.41 | 6.24 | — | 1.91 | — | 1.60 | 3.61 | 20.52 | 5.60 | — | — | 9.94 | — | 3.16 | — |
| Aug 30, 2006 | 2.97 | 1.44 | 8.78 | — | 3.95 | — | 1.55 | 4.87 | 17.98 | 5.51 | — | — | 13.93 | — | 3.54 | — |
| Aug 31, 2005 | 2.91 | 1.32 | 11.84 | — | 3.86 | — | 1.38 | 3.94 | 21.64 | 5.80 | — | — | 8.64 | — | 3.15 | — |
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/S, long-term trends, comparison to sector (software & services)
| Automatic Data Processing Inc. | Software & Services | |
|---|---|---|
| Aug 4, 2021 | 5.98 | 9.45 |
| Aug 5, 2020 | 3.97 | 7.72 |
| Aug 9, 2019 | 5.13 | 6.11 |
| Aug 3, 2018 | 4.41 | 5.24 |
| Aug 4, 2017 | 4.00 | 4.65 |
| Aug 5, 2016 | 3.51 | 3.95 |
| Aug 7, 2015 | 3.42 | 3.41 |
| Aug 8, 2014 | 3.20 | 3.34 |
| Aug 19, 2013 | 3.07 | 2.89 |
| Aug 20, 2012 | 2.65 | 2.79 |
| Aug 24, 2011 | 2.42 | 2.85 |
| Aug 25, 2010 | 2.15 | 2.73 |
| Aug 28, 2009 | 2.18 | 2.61 |
| Aug 29, 2008 | 2.57 | 2.31 |
| Aug 29, 2007 | 3.15 | 6.95 |
| Aug 30, 2006 | 2.97 | 6.20 |
| Aug 31, 2005 | 2.91 | 6.73 |
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/S, long-term trends, comparison to industry (information technology)
| Automatic Data Processing Inc. | Information Technology | |
|---|---|---|
| Aug 4, 2021 | 5.98 | 6.98 |
| Aug 5, 2020 | 3.97 | 6.11 |
| Aug 9, 2019 | 5.13 | 4.62 |
| Aug 3, 2018 | 4.41 | 4.31 |
| Aug 4, 2017 | 4.00 | 4.18 |
| Aug 5, 2016 | 3.51 | 3.46 |
| Aug 7, 2015 | 3.42 | 3.03 |
| Aug 8, 2014 | 3.20 | 3.31 |
| Aug 19, 2013 | 3.07 | 2.85 |
| Aug 20, 2012 | 2.65 | 2.88 |
| Aug 24, 2011 | 2.42 | 2.84 |
| Aug 25, 2010 | 2.15 | 3.04 |
| Aug 28, 2009 | 2.18 | 3.11 |
| Aug 29, 2008 | 2.57 | 2.38 |
| Aug 29, 2007 | 3.15 | 5.73 |
| Aug 30, 2006 | 2.97 | 5.21 |
| Aug 31, 2005 | 2.91 | 5.62 |
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).