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What Awaits Automatic Data Processing (ADP) in Q3 Earnings?

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Automatic Data Processing, Inc. (ADP - Free Report) is scheduled to report third-quarter fiscal 2022 results on Apr 27, before market open.

Let’s check out how things have shaped up for this announcement.

Expectations This Time Around

The Zacks Consensus Estimate for third-quarter revenues stands at $4.46 billion, indicating 8.7% growth from the year-ago quarter’s reported figure.

The consensus mark for Employer Services revenues is pegged at $2.96 billion, implying growth of 6.4% from the year-ago quarter’s reported figure. The uptick is likely to have been aided by growth in new business bookings.

The consensus estimate for PEO Services revenues is pegged at $1.51 billion, indicating growth of 13.9% year over year. The upside is likely to have been aided by an increase in average worksite employees paid by PEO Services.

The consensus mark for Interest on funds held for clients’ revenues is pegged at $128 million, indicating growth of 19.6% year over year. Strength across the company’s average client funds balances might have aided the segmental growth.

The consensus estimate for earnings stands at $2.07 per share, implying year-over-year growth of 9.5%.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Automatic Data Processing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Automatic Data Processing has an Earnings ESP of 0.00% and a Zacks Rank #2.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on their first-quarter 2022 earnings:

Cross Country Healthcare (CCRN - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cross Country Healthcare has an expected earnings growth rate of 15.4% for the current year. The company has a trailing four-quarter earnings surprise of 41.5%, on average.

Cross Country Healthcare’s shares have surged 62.6% in the past year. The company has a long-term earnings growth of 6.5%.

First Advantage (FA - Free Report) has an Earnings ESP of +5.63% and a Zacks Rank #2.

First Advantage has an expected earnings growth rate of 0.9% for the current year.

First Advantage has a trailing four-quarter earnings surprise of 45.1%, on average.

WEX (WEX - Free Report) has an Earnings ESP of +1.57% and a Zacks Rank #3.

WEX hasan expected earnings growth rate of 27.6% for the current year. The company has a trailing four-quarter earnings surprise of 9.9%, on average.

WEX has a long-term earnings growth of 17.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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