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Automatic Data Processing (ADP) Up 6% in a Year: Here's Why
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Shares of Automatic Data Processing, Inc.(ADP - Free Report) have gained 6% over the past year, outperforming the 0.5% decline of the industry it belongs to. The Zacks S&P 500 composite declined 14% in the same time frame.
Image Source: Zacks Investment Research
Let’s delve deeper into factors that have contributed to the company’s price performance:
Consecutive Earnings & Revenue Beat
ADP reported better-than-expected earnings and revenue performance in the last four quarters. Strength across Employer Services and Professional Employer Organization Services’ revenues should have aided the company’s top-line performance. The bottom line is expected to have benefited from operational efficiency.
Raised 2022 Guidance
ADP has raised its fiscal 2022 outlook. The company now expects revenues to register 9-10% growth compared with the earlier-expected growth rate of 8-9%. Adjusted EPS is now expected to register 15-17% growth compared with the prior-expected growth rate of 12-14%. The company now expects Employer Services revenues to grow at a rate of about 7% compared with the prior-expected growth rate of about 6%, and PEO Services revenues to grow at a rate of 14-15% compared with the prior-expected growth rate of 13% to 15%.
Strategic Acquisitions Bode Well
Acquisitions like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company have strengthened ADP’s customer base and are helping it expand operations in international markets. The company continues to pursue acquisitions that strategically fit its overall business mix and are easy to integrate over the long term.
Some better-ranked stocks in the broader Business Services sector that investors can consider are Cross Country Healthcare (CCRN - Free Report) , Gartner (IT - Free Report) and Avis Budget (CAR - Free Report) , each sporting a Zacks Rank #1 at present.
Cross Country Healthcare has an expected earnings growth rate of 54.2% for the current year. CCRN has a trailing four-quarter earnings surprise of 29.2%, on average.
Cross Country Healthcare has a long-term earnings growth rate of 6.9%.
Gartner’s shares have gained 10.6% in the past year. IT delivered a trailing four-quarter earnings surprise of 24.2%, on average.
The Zacks Consensus Estimate for Gartner's current-year earnings has moved up 13.6% in the past 90 days.
Avis Budget has an expected earnings growth rate of 59.8% for the current year. CAR delivered a trailing four-quarter earnings surprise of 102.1%, on average.
Avis Budget has a long-term earnings growth rate of 19.4%.
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Automatic Data Processing (ADP) Up 6% in a Year: Here's Why
Shares of Automatic Data Processing, Inc.(ADP - Free Report) have gained 6% over the past year, outperforming the 0.5% decline of the industry it belongs to. The Zacks S&P 500 composite declined 14% in the same time frame.
Image Source: Zacks Investment Research
Let’s delve deeper into factors that have contributed to the company’s price performance:
Consecutive Earnings & Revenue Beat
ADP reported better-than-expected earnings and revenue performance in the last four quarters. Strength across Employer Services and Professional Employer Organization Services’ revenues should have aided the company’s top-line performance. The bottom line is expected to have benefited from operational efficiency.
Raised 2022 Guidance
ADP has raised its fiscal 2022 outlook. The company now expects revenues to register 9-10% growth compared with the earlier-expected growth rate of 8-9%. Adjusted EPS is now expected to register 15-17% growth compared with the prior-expected growth rate of 12-14%. The company now expects Employer Services revenues to grow at a rate of about 7% compared with the prior-expected growth rate of about 6%, and PEO Services revenues to grow at a rate of 14-15% compared with the prior-expected growth rate of 13% to 15%.
Strategic Acquisitions Bode Well
Acquisitions like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company have strengthened ADP’s customer base and are helping it expand operations in international markets. The company continues to pursue acquisitions that strategically fit its overall business mix and are easy to integrate over the long term.
Zacks Rank and Stocks to Consider
ADP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Business Services sector that investors can consider are Cross Country Healthcare (CCRN - Free Report) , Gartner (IT - Free Report) and Avis Budget (CAR - Free Report) , each sporting a Zacks Rank #1 at present.
Cross Country Healthcare has an expected earnings growth rate of 54.2% for the current year. CCRN has a trailing four-quarter earnings surprise of 29.2%, on average.
Cross Country Healthcare has a long-term earnings growth rate of 6.9%.
Gartner’s shares have gained 10.6% in the past year. IT delivered a trailing four-quarter earnings surprise of 24.2%, on average.
The Zacks Consensus Estimate for Gartner's current-year earnings has moved up 13.6% in the past 90 days.
Avis Budget has an expected earnings growth rate of 59.8% for the current year. CAR delivered a trailing four-quarter earnings surprise of 102.1%, on average.
Avis Budget has a long-term earnings growth rate of 19.4%.