In the ever-evolving landscape of tech and services, Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM) stand out as two formidable players. While ADP is rooted in Staffing & Employment Services, providing essential human capital management solutions, Atlassian innovates within the Software – Application sector, empowering teams with collaborative tools. Both companies share a commitment to enhancing workplace efficiency, making their comparison particularly insightful for investors. Join me as we explore which of these companies presents the most intriguing investment opportunity.
Table of contents
Company Overview
Automatic Data Processing, Inc. Overview
Automatic Data Processing, Inc. (ADP) is a leader in cloud-based human capital management solutions, primarily serving businesses of various sizes. Founded in 1949 and headquartered in Roseland, NJ, ADP operates through two main segments: Employer Services and Professional Employer Organization (PEO). The company provides a comprehensive suite of services, including payroll processing, HR outsourcing, benefits administration, and compliance solutions. With a market capitalization of approximately $103B and a workforce of around 64,000 employees, ADP prides itself on delivering scalable and innovative HR solutions that streamline operations and enhance employee engagement.
Atlassian Corporation Overview
Atlassian Corporation, established in 2002 and based in Sydney, Australia, specializes in software development and collaboration tools designed to enhance productivity for teams across various sectors. Its flagship products, such as Jira Software, Confluence, and Trello, facilitate project management and team collaboration. With a market cap of about $39B and employing over 12,000 individuals, Atlassian aims to empower teams to work better together and adapt to changing business needs. The company’s focus on innovation and user experience has solidified its position as a key player in the software application industry.
Key similarities and differences
Both ADP and Atlassian provide essential services that enhance organizational efficiency, yet they differ significantly in their business models. ADP focuses on human capital management solutions, while Atlassian centers its offerings around software applications for team collaboration and project management. Additionally, ADP’s services are primarily aimed at HR functions, whereas Atlassian’s tools are designed to improve workflow across diverse business functions.
Income Statement Comparison
The following table provides an overview of the most recent income statement metrics for Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM), allowing for a direct financial comparison.
| Metric | [Company A] | [Company B] |
|---|---|---|
| Market Cap | 103.26B | 39.24B |
| Revenue | 20.56B | 5.22B |
| EBITDA | 6.24B | 24M |
| EBIT | 5.76B | -68M |
| Net Income | 4.08B | -257M |
| EPS | 10.02 | -0.98 |
| Fiscal Year | 2025 | 2025 |
Interpretation of Income Statement
In the most recent fiscal year, ADP experienced a notable revenue increase to 20.56B, up from 19.20B in the prior year, reflecting steady growth in its core business. Conversely, TEAM’s revenue improved to 5.22B from 4.36B, yet it still reported a net loss of 257M, indicating ongoing challenges in profitability. ADP’s EBITDA margin remains robust, while TEAM’s negative EBIT suggests operational efficiency issues. Overall, ADP shows a solid performance trajectory, while TEAM needs to address its cost structure to achieve profitability.
Financial Ratios Comparison
In the table below, I compare key financial ratios of Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM) as of June 30, 2025. These metrics provide insights into their profitability, efficiency, and financial stability.
| Metric | ADP | TEAM |
|---|---|---|
| ROE | 65.93% | -19.08% |
| ROIC | 24.66% | -11.63% |
| P/E | 30.77 | -207.13 |
| P/B | 20.29 | 39.51 |
| Current Ratio | 1.05 | 1.22 |
| Quick Ratio | 1.05 | 1.22 |
| D/E | 1.46 | 0.92 |
| Debt-to-Assets | 16.99% | 23.97% |
| Interest Coverage | 11.87 | -4.27 |
| Asset Turnover | 0.39 | 0.86 |
| Fixed Asset Turnover | 19.97 | 19.02 |
| Payout Ratio | 58.80% | 0.00% |
| Dividend Yield | 1.91% | 0.00% |
Interpretation of Financial Ratios
ADP exhibits strong profitability and efficiency, as indicated by its high ROE, ROIC, and interest coverage ratio. In contrast, TEAM’s negative ratios raise concerns about its profitability and financial health. The high P/B ratio for TEAM suggests it may be overvalued relative to its book value. Overall, while ADP appears to be a robust investment, TEAM poses significant risks and may require careful consideration before investing.
Dividend and Shareholder Returns
Automatic Data Processing, Inc. (ADP) consistently returns value to shareholders through dividends, yielding approximately 1.91% for FY 2025 with a payout ratio around 58.8%. This suggests a sustainable distribution supported by free cash flow. In contrast, Atlassian Corporation (TEAM) does not pay dividends, focusing instead on reinvestment for growth. While this strategy can drive long-term value, the absence of immediate returns could concern some investors. Overall, ADP’s approach appears more conducive to immediate shareholder value, while TEAM’s strategy hinges on future growth potential.
Strategic Positioning
Automatic Data Processing, Inc. (ADP) holds a significant market share in the cloud-based human capital management sector, continuously expanding its Employer Services and PEO segments. Meanwhile, Atlassian Corporation (TEAM) competes in the software application industry with a robust portfolio, including Jira and Confluence. Both companies face competitive pressure from emerging technologies and innovative startups, necessitating ongoing adaptation to maintain their market positions. As technological disruptions increase, both firms must leverage their strengths to retain and grow their customer bases.
Stock Comparison
In the past year, both Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM) have experienced significant price movements, reflecting varying trading dynamics and market sentiments.
Trend Analysis
For ADP, over the past year, the stock has seen a price change of +8.54%, indicating a bullish trend. However, during the recent period from September 14, 2025, to November 30, 2025, the stock has declined by -13.02%. Notably, the highest price reached was 326.81, while the lowest was 235.21. The trend shows signs of deceleration, with a standard deviation of 26.5 suggesting some volatility in its price movements.
Conversely, TEAM has experienced a price change of -33.87% over the past year, categorizing it as a bearish trend. In the recent period, the stock has also declined by -14.5%. The notable high was 314.28, and the low was 141.43. Similar to ADP, the trend for TEAM is also decelerating, with a standard deviation of 40.13 indicating higher volatility compared to ADP.
In summary, ADP appears to be in a bullish position overall despite recent declines, while TEAM’s significant drop suggests caution moving forward.
Analyst Opinions
Recent analyst recommendations for Automatic Data Processing, Inc. (ADP) indicate a consensus “Buy” rating, with analysts noting strong financial metrics such as high return on equity and solid cash flow, which support growth potential. Notably, analysts emphasize ADP’s robust market position and consistent performance. In contrast, Atlassian Corporation (TEAM) holds a “Sell” rating, with concerns over weak return on equity and profitability metrics, leading analysts to advise caution. Overall, the sentiment for ADP is positive, while TEAM faces skepticism among analysts.
Stock Grades
In this section, I’ll present the latest stock grades for two companies, Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM), based on reliable grading data from recognized firms.
Automatic Data Processing, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | maintain | Underweight | 2025-10-30 |
| Wells Fargo | maintain | Underweight | 2025-10-30 |
| UBS | maintain | Neutral | 2025-09-17 |
| Morgan Stanley | maintain | Equal Weight | 2025-07-31 |
| Stifel | maintain | Hold | 2025-07-31 |
| Morgan Stanley | maintain | Equal Weight | 2025-06-17 |
| Mizuho | maintain | Outperform | 2025-06-13 |
| UBS | maintain | Neutral | 2025-06-13 |
| RBC Capital | maintain | Sector Perform | 2025-06-05 |
| TD Securities | maintain | Hold | 2025-05-21 |
Atlassian Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Bernstein | maintain | Outperform | 2025-11-18 |
| Macquarie | maintain | Outperform | 2025-11-03 |
| Mizuho | maintain | Outperform | 2025-10-31 |
| Bernstein | maintain | Outperform | 2025-10-31 |
| TD Cowen | maintain | Hold | 2025-10-27 |
| BMO Capital | maintain | Outperform | 2025-10-24 |
| UBS | maintain | Neutral | 2025-10-24 |
| Keybanc | maintain | Overweight | 2025-10-23 |
| Canaccord Genuity | maintain | Buy | 2025-10-22 |
| BWG Global | upgrade | Positive | 2025-10-14 |
Overall, ADP has received consistent “Underweight” and “Neutral” ratings, indicating cautious sentiment among analysts. In contrast, TEAM enjoys a more favorable outlook with multiple “Outperform” ratings, suggesting stronger confidence in its performance moving forward.
Target Prices
The consensus target prices for the selected companies suggest positive expectations from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Automatic Data Processing, Inc. (ADP) | 290 | 245 | 278.25 |
| Atlassian Corporation (TEAM) | 300 | 185 | 232.85 |
For ADP, the consensus target of 278.25 indicates a potential upside from the current price of 255.3, while TEAM’s target of 232.85 suggests a similar outlook compared to its current price of 149.52. Overall, both companies exhibit favorable potential according to analyst expectations.
Strengths and Weaknesses
Below is a comparative analysis of the strengths and weaknesses of Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM).
| Criterion | ADP | TEAM |
|---|---|---|
| Diversification | High – Operates in HR and PEO services | Moderate – Focused on software solutions |
| Profitability | Strong, with a net profit margin of 19.84% | Weak, with a net profit margin of -4.92% |
| Innovation | Moderate – Invests in cloud-based solutions | High – Strong focus on product development |
| Global presence | Strong – Operates in multiple countries | Moderate – Primarily targets software markets |
| Market Share | Leading in HR services | Growing but faces stiff competition in software |
| Debt level | Moderate – Debt to Equity ratio of 1.46 | High – Debt to Equity ratio of 1.21 |
Key takeaways from this analysis emphasize ADP’s strong profitability and diversification within its industry, while TEAM demonstrates significant innovation potential but struggles with profitability and high debt levels.
Risk Analysis
Below is a summary table of key risks for Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM).
| Metric | ADP | TEAM |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | Moderate | Moderate |
| Operational Risk | Low | High |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Low | High |
In analyzing these risks, it’s evident that TEAM faces higher operational and market risks due to its volatile earnings and dependence on software trends. Recent pressures from increased competition and economic fluctuations could significantly impact its performance.
Which one to choose?
In comparing Automatic Data Processing, Inc. (ADP) and Atlassian Corporation (TEAM), ADP shows stronger fundamentals with a market cap of approximately $126B and profitability reflected in its net profit margin of 20%. It also boasts a solid rating of B+, indicating favorable analyst sentiment. ADP’s stock trend is currently bullish, despite a recent decline of 13%. In contrast, Atlassian has a much smaller market cap of about $53B and is in a bearish trend, with a concerning net income margin of -5%. Its rating stands at C, suggesting caution.
For growth-focused investors, ADP appears favorable for long-term stability and dividends (yielding ~1.9%), while risk-averse investors may prefer to avoid TEAM due to its ongoing financial challenges. Potential risks include ADP’s valuation concerns and TEAM’s operational losses.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Automatic Data Processing, Inc. and Atlassian Corporation to enhance your investment decisions:
