New Jersey-based Automatic Data Processing, Inc. (ADP) is a leading global provider of human capital management (HCM) solutions. The company, valued at a market cap of $127.7 billion, offers payroll, HR, talent management, and workforce analytics services.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” and ADP fits the label perfectly. With a strong presence across various industries, ADP leverages advanced technology, AI-driven insights, and cloud-based platforms to streamline HR processes for businesses of all sizes. The company's recurring revenue model, client retention, and continuous innovation reinforce its competitive edge in the HCM space.
ADP is currently trading 3.8% below its 52-week high of $322.84, touched on March 3. Shares of this tech company gained 2.9% over the past three months, outpacing the Dow Jones Industrials Average’s ($DOWI) 3.9% fall during the same time frame.
ADP’s performance looks stellar in the long term. It has gained 14.9% over the past six months, surpassing DOWI’s 5.5% returns. Shares of ADP are up 27.2% over the past 52 weeks, exceeding DOWI’s 11.5% gains over the same time frame.
Yet, ADP stock has been trading above its 200-day moving average since mid-July and over its 50-day moving average since the end of January.
Automatic Data Processing stock gained 1.7% on Jan. 29, outperforming the broader market despite declines in the S&P 500 and Nasdaq Composite. The rally followed strong fiscal Q2 results, with adjusted EPS of $2.35 on $5.1 billion in revenue, exceeding Wall Street estimates. Employer Services and PEO segments both saw 8% year-over-year revenue growth.
ADP raised its full-year sales growth forecast to 6%-7% and expects adjusted EPS growth of 7%-9%. Additionally, the company increased its outlook for client-fund balances and interest revenue, further supporting investor confidence.
ADP has surpassed its rival, Paychex, Inc. (PAYX), which gained 26.5% over the past 52 weeks.
Given ADP’s recent relative underperformance, analysts remain skeptical about its prospects. The stock has a consensus rating of “Hold” from the 18 analysts covering it. Further, the company currently trades above its mean price target of $309.27.
On the date of publication, Kritika Sarmah 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.
