ADPNEUTRAL

Gross Margin

48.3%

Higher than 83% of Industrials sector peers

Updated 1928h ago

Sector Performance

83th percentile

ADP

48.3%

Sector Median

29.0%

Sector Avg

662.6%

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Deep Analysis

Automatic Data Processing's gross margin of 48.3% means that for every dollar of revenue, the company keeps 48.3 cents after paying the direct costs of delivering its services, such as payroll processing and HR software.

This figure sits well above the Industrials sector median of 28.9% and places ADP in the 83rd percentile among its sector peers, indicating a clear cost advantage or pricing power relative to competitors. No trend information is available because year-over-year and quarter-over-quarter changes are listed as N/A, and only a single historical value is provided, so it is not possible to assess whether margins are improving, deteriorating, or stable. The combination of a high absolute margin with no trend data means investors cannot gauge the direction of profitability, which limits the ability to identify either a clear risk or a clear opportunity from this metric alone. This lack of directional insight supports the overall NEUTRAL verdict: a strong gross margin is a positive quality, but without any movement history, it does not tilt the stock toward a bullish or bearish stance.

Frequently Asked Questions

What does the Gross Margin tell investors about ADP?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does ADP's Gross Margin compare to its sector?

ADP's Gross Margin of 48.3% compares to a Industrials sector median of 29.0%, placing it in the 83th percentile.

Who are ADP's closest peers by Gross Margin?

The closest Industrials peers by Gross Margin include: BLDR (28.3%), BE (30.0%), SAVE (31.3%), AAL (26.0%), CARR (23.3%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.