Automatic Data Processing (ADP) closed the most recent trading day at $233.54, moving -0.92% from the previous trading session. This change was narrower than the S&P 500's 1.13% loss on the day. Elsewhere, the Dow lost 1.01%, while the tech-heavy Nasdaq lost 0.13%.
Heading into today, shares of the payroll and human resources company had lost 8.06% over the past month, outpacing the Business Services sector's loss of 9.45% and lagging the S&P 500's loss of 7.59% in that time.
Wall Street will be looking for positivity from Automatic Data Processing as it approaches its next earnings report date. This is expected to be October 26, 2022. The company is expected to report EPS of $1.80, up 9.09% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.15 billion, up 8.34% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.05 per share and revenue of $17.88 billion. These totals would mark changes of +14.84% and +8.36%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Automatic Data Processing. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Automatic Data Processing is holding a Zacks Rank of #2 (Buy) right now.
Investors should also note Automatic Data Processing's current valuation metrics, including its Forward P/E ratio of 29.29. This valuation marks a premium compared to its industry's average Forward P/E of 13.
We can also see that ADP currently has a PEG ratio of 2.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Outsourcing was holding an average PEG ratio of 1.39 at yesterday's closing price.
The Outsourcing industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 40, which puts it in the top 16% of all 250+ industries.
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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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