Several large-cap stocks just issued big-time buyback capacity increases. These buyback boosts come as all three stocks have taken huge tumbles over the past several months, down 20% or more from their highs. The combination of these factors suggests that management teams at these companies may view their shares as undervalued.
Slow Hiring Hurts ADP, Fires Back With Big Repurchase Plan
First up is Automatic Data Processing (NASDAQ: ADP). Since hitting an all-time closing high near $321 in June of 2025, ADP shares have retreated significantly, dropping 20%. The company’s fiscal Q1 earnings report was strong, but its shares still fell by almost 7% the day following. (Note that ADP's fiscal year and calendar year are not aligned).
ADP beat estimates on sales and adjusted earnings per share (EPS) and forecasted steady growth going forward, combined with margin expansion. However, the company indicated weakness in the job market.
In aggregate, ADP clients did not increase their headcount last quarter, suggesting a weak hiring environment.
ADP often charges customers per employee, so this is a headwind for the company.
However, it is possible that ADP believes the sell-off in its shares is overdone.
On Jan. 14, the company announced a $6 billion share buyback program. This program is very sizable, equal to around 5.8% of the company’s $104 billion market capitalization.
This gives the company a significant ability to lower its outstanding share count, spreading its value over fewer shares. With the buyback program and the Jan. 28 earnings report as potential near-term catalysts, this is a stock to watch going forward.
CoStar Tanks as Battle With Zillow Heats Up
CoStar Group (NASDAQ: CSGP) is a $28 billion data, analytics, and marketplace software provider for the commercial real estate industry. The company has made moves to challenge Zillow Group’s (NASDAQ: ZG) dominance in the residential real estate marketplace through its websites, like Homes.com.
CoStar hit its 52-week closing high back in August of 2025 near $97, a figure that was just a few dollars below its all-time closing high from 2021. Since then, the stock has lost 32% of its value, with a notable 10% loss coming after CoStar’s latest earnings. The company also beat estimates on sales, adjusted EPS, and even boosted its full-year 2025 guidance.
CoStar is investing aggressively to compete with Zillow, allocating significant resources toward artificial intelligence tools. This seems to have scared off many investors, as these investments will weigh on margins.
With shares down big, CoStar announced a $1.5 billion share buyback program on Jan. 7. This is equal to 5.4% of the company’s market capitalization, a signal of management confidence going forward. Notably, the company also increased its 2026 guidance and said that investment would moderate during the year.
PAYX Approves $1B Buyback With Shares Down +30%
Paychex (NASDAQ: PAYX) is another company in the payroll, human resources, and benefits solutions space. However, Paychex tends to focus more on small and medium-sized businesses, while ADP’s clients are often much larger. Like ADP, Paychex hit its 52-week and all-time closing high back in June of 2025, trading near $157. Shares have moved steeply in the opposite direction since, down around 32%.
The stock’s biggest stumble came after its earnings report in late June, when shares dropped almost 10% in one day. The firm met or exceeded estimates on sales and adjusted EPS. However, around $146 million in costs related to Paychex’s acquisition of Paycor caused non-adjusted operating income to fall by 11%. Additionally, hiring market uncertainties have put pressure on the stock, as they have on ADP.
On Jan. 16, Paychex announced a $1 billion share repurchase program, a potential sign that management sees value in the stock. The program is equal to a solid 2.6% of Paychex’s $38 billion market capitalization.
Notably, the company repurchased $290 million in shares over the past 12 months. Thus, the company has the capability to greatly increase its buyback spending pace now.
Watchlist Add: CoStar
These three names are all flashing confident signals to investors through their new buyback authorizations. Among this group, CoStar is particularly interesting. The company has already established itself as a stalwart in the commercial real estate space. The possibility of doing the same in retail would make the firm a very formidable force. The company’s huge buyback announcement and updated guidance are encouraging signs.