Automatic Data Processing, Inc. ADP has grown 7% in the past six months. It has a long-term expected earnings per share growth rate of 11.7%.
The Zacks Consensus Estimate of ADP’s revenues for the fiscal second quarter is pegged at $4.66 billion, indicating 6.1% growth from the year-ago reported figure. The estimate for earnings is $2.1 per share, which is up 7.1% from the year-ago reported figure. The consensus mark for fiscal 2024 revenues indicates a 6.2% increase while for earnings it indicates an 11.1% increase.
ADP drives innovation, expands globally and strengthens through strategic acquisitions like Celergo, WorkMarket, Global Cash Card, and The Marcus Buckingham Company. Collaborations with Workday and Salesforce enhance HR experiences.
Automatic Data Processing, Inc. Price
Automatic Data Processing, Inc. price | Automatic Data Processing, Inc. Quote
Factors in Favor
ADP has accelerated DataCloud penetration and invested in inside sales, mid-market migrations and service alignment. Ongoing transformation enhances innovation, operations, margins and global expansion. Strategic acquisitions like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company strengthen ADP’s customer base. The recent addition of Honu HR, Inc. DBA Sora (Sora) aligns with ADP’s strategy to streamline HR processes through automation, efficiency improvement and employee experiences. ADP continues to seek acquisitions that strategically fit its business mix and facilitate long-term integration.
ADP is gaining through its partnerships and collaborations. Workday, Inc. WDAY and ADP extended their partnership, aiming to enhance global payroll, compliance and HR experiences. Announced at Workday Rising, this collaboration built on a decade-long relationship for streamlined interactions and improved visibility into HCM data.
Similarly, Salesforce CRM and ADP collaborated to enhance the client experience for more than 1 million clients. Leveraging Salesforce’s Customer 360 platform, this partnership integrated ADP’s HCM expertise and data with AI, enabling quick, real-time responses from service teams through generative AI technology. NAWBO and ADP’s survey reveals that 92% of women-owned businesses are microbusinesses, which crucially contribute to 63% of household income. Empowering their growth can enhance wealth in underserved populations.
ADP excels in HCM tech and services through a three-tier strategy: delivering comprehensive cloud-based solutions, expanding its global presence with local software and offering multi-country solutions.
Some Risks
ADP’s current ratio at the end of first-quarter fiscal 2024 was pegged at 0.98, lower than the current ratio of 0.99 reported at the end of the previous quarter. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
The outsourcing industry is labor-intensive and heavily dependent on foreign talent. Rising talent costs due to competition could curb the industry’s growth. ADP, being one of the companies in the industry, is likely to be affected.
ADP currently holds a Zacks Rank #3 (Hold).
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