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With a market cap of $96.4 billion, Automatic Data Processing, Inc. (ADP) is a leading provider of cloud-based Human Capital Management (HCM) solutions based in Roseland, New Jersey. The company is expected to announce its fiscal Q4 earnings results before the market opens on Wednesday, July 31.
Ahead of the event, analysts are expecting ADP to report a profit of $2.07 per share, up 9.5% from $1.89 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in each of the last four quarterly reports. Steady demand for its payroll software and new bookings helped the company surpass the consensus EPS estimate by 4.4% in the most recent quarter.
For fiscal 2024, analysts expect ADP to report EPS of $9.16, up 11.3% from $8.23 in fiscal 2023.
Over the past 52 weeks, ADP has gained 7.6%, trailing behind both the S&P 500 Index's ($SPX) 25.2% rise and the S&P 500 Industrial Sector SPDR's (XLI) 13.5% increase over the same period.
The shares of ADP surged 3% on Jan. 31 due to its Q2 earnings exceeding expectations, supported by strong growth in both its Employer Services and PEO Services segments and an upbeat outlook for fiscal year 2024. Moreover, the stock rose 2.3% on May 1 following its Q3 earnings exceeding expectations, driven by strong revenue growth in the employer services segment. This segment thrived on consistent demand for payroll software and employee management solutions amid improving U.S. job market conditions.
Analysts' consensus rating on Automatic Data Processing stock is cautious, with a "Hold" rating overall. Among 18 analysts covering the stock, two recommend a "Strong Buy," 14 suggest a "Hold," and two advise a "Strong Sell," a consensus that has remained the same over the past three months.
The average analyst price target for ADP is $259.40, indicating a potential upside of 10.1% from the current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
