Business Services Software "Weekly Payroll Pulse & Technology Tally" McVeigh

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Business Services Software "Weekly Payroll Pulse & Technology Tally" McVeigh

Valuation Method and Risk Statement

Investing in the technology sector entails above-average risk given low sales visibility, rapid

pace of innovation and technological change, intense competition, frequent M&A, and low

barriers to entry in many markets.

ADP’s performance is highly correlated with macroeconomic trends like health of the labor

market, business cycles, interest rate environment, etc. A macroeconomic downturn would

likely reduce revenue and earnings. ADP also operates in a highly competitive industry with

large number of cloud native software providers. The company risks losing share if unable to

adapt to new technological advancements and compete effectively with tech-focused peers.

Our price target is based on P/E multiples.

INTA: Multiple based 2028E EV/Sales. 2 year multiple rolled forward by cost of equity to arrive

at 12 month price target. Risks: (1) achieving cloud annual recurring revenue [ARR] targets as

growth is predicated on new logo wins + upsell; (2) M&A integration + (3) insider/sponsor

overhang.

NIQ: Buy rating include potential churn if client terminate or fail to renew contracts, as well as

reliance on third-parties for certain data, services, and IT/operations functions, which could be

disrupted by increased data usage restrictions. NIQ also operates in a competitive market with

large software, internet platforms and database management could potentially enter market

and could adopt aggressive pricing.

PCTY: Price target derived from EV/Sales on our 2026E. Price target based on a 2-year multiple

on FY26 estimates, rolled forward by Cost of Equity to derive our 12-month price target.