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6 Reasons to Bet on Automatic Data Processing (ADP) Stock
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Automatic Data Processing, Inc. (ADP - Free Report) is currently a well-performing stock in the outsourcing sector with a significant rise in share price over the past year and strong fundamentals. Therefore, if you haven’t taken advantage of the price appreciation yet, it’s time you add the stock to your portfolio as we believe that it has the potential to carry the momentum in the near term.
Why an Attractive Pick?
Share Price Appreciation: A glimpse of the company’s price trend reveals that the stock has had an impressive run over the past year. ADP returned 23%, which compared favorably with the 14.3% rise in the industry it belongs to and the Zacks S&P 500 composite’s 9.4% fall.
Solid Rank: ADP currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Nine estimates for fiscal 2023 moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2023 increased 3.9%.
Positive Earnings Surprise History: ADP has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 5%.
Strong Growth Prospects: The Zacks Consensus Estimate for the company’s fiscal 2023 earnings of $8.05 reflects year-over-year growth of 14.8%. Moreover, earnings are expected to register 12.1% growth in fiscal 2024. The stock has a long-term expected earnings per share growth rate of 12%.
Growth Drivers: ADP’s three-tier business strategy helps it to maintain and grow its strong position as a human capital management (HCM) technology and services provider. The company is focused on delivering a complete suite of cloud-based HCM and HR Outsourcing solutions. It is expanding its international HCM and HRO businesses with established local, in-country software solutions and cloud-based multi-country solutions.
ADP has a strong business model, high recurring revenues, good margins, robust client retention and low capital expenditure. It has a strong cash-generating ability that allows it to pursue growth in areas that exhibit true potential.
ADP has been able to accelerate DataCloud penetration and increase investment in inside sales, mid-market migrations and service alignment initiatives through its ongoing transformation initiatives. Through these initiatives, the company continues to innovate, improve operations, expand margins and enhance innovation abilities.
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6 Reasons to Bet on Automatic Data Processing (ADP) Stock
Automatic Data Processing, Inc. (ADP - Free Report) is currently a well-performing stock in the outsourcing sector with a significant rise in share price over the past year and strong fundamentals. Therefore, if you haven’t taken advantage of the price appreciation yet, it’s time you add the stock to your portfolio as we believe that it has the potential to carry the momentum in the near term.
Why an Attractive Pick?
Share Price Appreciation: A glimpse of the company’s price trend reveals that the stock has had an impressive run over the past year. ADP returned 23%, which compared favorably with the 14.3% rise in the industry it belongs to and the Zacks S&P 500 composite’s 9.4% fall.
Automatic Data Processing, Inc. Price
Automatic Data Processing, Inc. price | Automatic Data Processing, Inc. Quote
Solid Rank: ADP currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Nine estimates for fiscal 2023 moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2023 increased 3.9%.
Positive Earnings Surprise History: ADP has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 5%.
Strong Growth Prospects: The Zacks Consensus Estimate for the company’s fiscal 2023 earnings of $8.05 reflects year-over-year growth of 14.8%. Moreover, earnings are expected to register 12.1% growth in fiscal 2024. The stock has a long-term expected earnings per share growth rate of 12%.
Growth Drivers: ADP’s three-tier business strategy helps it to maintain and grow its strong position as a human capital management (HCM) technology and services provider. The company is focused on delivering a complete suite of cloud-based HCM and HR Outsourcing solutions. It is expanding its international HCM and HRO businesses with established local, in-country software solutions and cloud-based multi-country solutions.
ADP has a strong business model, high recurring revenues, good margins, robust client retention and low capital expenditure. It has a strong cash-generating ability that allows it to pursue growth in areas that exhibit true potential.
ADP has been able to accelerate DataCloud penetration and increase investment in inside sales, mid-market migrations and service alignment initiatives through its ongoing transformation initiatives. Through these initiatives, the company continues to innovate, improve operations, expand margins and enhance innovation abilities.
Other Stocks to Consider
Some other top-ranked stocksin the broader Zacks Business Services sector are Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and H&R Block, Inc. (HRB - Free Report) .
Avis Budget sports a Zacks Rank #1 at present. CAR has an earnings growth rate of 108.4% for 2022.
Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.
Genpact carries a Zacks Rank #2 at present. G has a long-term earnings growth expectation of 12.3%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
H&R Blockcurrently flaunts a Zacks Rank of 1. HRB has a long-term earnings growth expectation of 12.5%.
HRB delivered a trailing four-quarter earnings surprise of 19.2%, on average.