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Automatic Data Processing (ADP) Ascends While Market Falls: Some Facts to Note

In the latest trading session, Automatic Data Processing (ADP) closed at $246.64, marking a +0.73% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.04%. Elsewhere, the Dow saw a downswing of 0.03%, while the tech-heavy Nasdaq appreciated by 0.03%.

The the stock of payroll and human resources company has risen by 1.01% in the past month, leading the Business Services sector's gain of 0.38% and undershooting the S&P 500's gain of 2.57%.

The investment community will be closely monitoring the performance of Automatic Data Processing in its forthcoming earnings report. The company is scheduled to release its earnings on May 1, 2024. The company is forecasted to report an EPS of $2.76, showcasing a 9.52% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $5.22 billion, reflecting a 6.01% rise from the equivalent quarter last year.

ADP's full-year Zacks Consensus Estimates are calling for earnings of $9.14 per share and revenue of $19.15 billion. These results would represent year-over-year changes of +11.06% and +6.32%, respectively.

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Investors might also notice recent changes to analyst estimates for Automatic Data Processing. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Automatic Data Processing is holding a Zacks Rank of #2 (Buy) right now.

From a valuation perspective, Automatic Data Processing is currently exchanging hands at a Forward P/E ratio of 26.79. This denotes a premium relative to the industry's average Forward P/E of 16.84.

We can also see that ADP currently has a PEG ratio of 2.3. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Outsourcing industry had an average PEG ratio of 1.29 as trading concluded yesterday.

The Outsourcing industry is part of the Business Services sector. With its current Zacks Industry Rank of 91, this industry ranks in the top 37% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report

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