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Jan 28, 2023

ADP (ADP, $220.80) beats fiscal Q2 earnings expectations

Automatic Data Processing, Inc. posted second-quarter fiscal 2023 earnings that exceeded analysts’ expectations.

The human resources management company’s adjusted earnings per share for the quarter grew +19% from the year-ago quarter to $1.96, surpassing the Zacks Consensus Estimate by 0.5% (according to Zacks Equity Research).

Total revenues were up +9.1% year-over-year to $4.4 billion, topping the Zacks Consensus Estimate by +0.3%.

Employer Services’ revenues rose +8% year-over-year on a reported basis and +10% on an organic constant-currency basis. Pays per control climbed +5% from the year-ago fiscal quarter.

PEO Services’ revenues grew +11% year over year to $1.5 billion. Average worksite employees paid by PEO Services rose +8% year-over-year to 711,000.

Interest on funds held for clients grew +77% to $187 million. Average client funds balance increased 4% to $33.4 billion, while average interest yield on client funds widened 90 basis points to 2.2%.

For fiscal 2023, ADP reaffirmed expectations of revenues growth of 8-9%. Adjusted EPS is still expected to increase 15-17%. Adjusted effective tax rate is estimated to be around 23%.

The company projects Employer Services revenues growth of about 8-9%, higher than prior outlook of 7-8%.  It continues to expect PEO Services revenues to grow at 8-9% rate vs. prior estimate of 10-12%.

Related Ticker: ADP

ADP in +0.77% Uptrend, rising for three consecutive days on February 23, 2024

Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where ADP advanced for three days, in of 337 cases, the price rose further within the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.

The Aroon Indicator entered an Uptrend today. In of 273 cases where ADP Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Bearish Trend Analysis

The 10-day RSI Indicator for ADP moved out of overbought territory on February 26, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 37 similar instances where the indicator moved out of overbought territory. In of the 37 cases, the stock moved lower in the following days. This puts the odds of a move lower at .

The Momentum Indicator moved below the 0 level on March 01, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on ADP as a result. In of 110 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for ADP turned negative on February 27, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where ADP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

ADP broke above its upper Bollinger Band on February 23, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock better than average.

The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. ADP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ADP's P/B Ratio (23.753) is slightly higher than the industry average of (7.627). P/E Ratio (29.068) is within average values for comparable stocks, (29.405). Projected Growth (PEG Ratio) (2.757) is also within normal values, averaging (2.974). Dividend Yield (0.021) settles around the average of (0.037) among similar stocks. ADP's P/S Ratio (5.855) is very high in comparison to the industry average of (1.437).

Industry description

Personnel Services comprise companies that provide staffing and human resources management solutions for businesses. Each company might be involved in one or more types of recruitment or employee solutions such as permanent or temporary staffing, career consulting, outsourcing, administrative services and many more. Some personnel services companies cater to large businesses, while some specialize in providing services to small/medium-sized organizations. These specialized services potentially expedite the process of getting the ‘right’ candidates and/or training them to meet the requirements of a business process. Some of the companies also cover other critical areas like internal auditing for a company. Robert Half International Inc., ManpowerGroup Inc. and Insperity, Inc. are examples of companies in the personnel services industry.

Market Cap

The average market capitalization across the Personnel Services Industry is 5.62B. The market cap for tickers in the group ranges from 78.46K to 102.57B. ADP holds the highest valuation in this group at 102.57B. The lowest valued company is GXXM at 78.46K.

High and low price notable news

The average weekly price growth across all stocks in the Personnel Services Industry was 3%. For the same Industry, the average monthly price growth was 2%, and the average quarterly price growth was -4%. RCRT experienced the highest price growth at 52%, while IGPPF experienced the biggest fall at -12%.

Volume

The average weekly volume growth across all stocks in the Personnel Services Industry was -5%. For the same stocks of the Industry, the average monthly volume growth was -28% and the average quarterly volume growth was -27%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 48
P/E Growth Rating: 49
Price Growth Rating: 61
SMR Rating: 58
Profit Risk Rating: 74
Seasonality Score: -7 (-100 ... +100)
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ADPDaily Signal changed days agoGain/Loss if shorted
 
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published General Information

General Information

a provider of business outsourcing solutions

Industry PersonnelServices

Profile
Fundamentals
Details
Industry
Data Processing Services
Address
One ADP Boulevard
Phone
+1 973 974-5000
Employees
60000
Web
https://www.adp.com
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ADP and

Correlation & Price change

A.I.dvisor indicates that over the last year, ADP has been closely correlated with PAYX. These tickers have moved in lockstep 74% of the time. This A.I.-generated data suggests there is a high statistical probability that if ADP jumps, then PAYX could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To ADP
1D Price
Change %
ADP100%
-0.57%
PAYX - ADP
74%
Closely correlated
-0.32%
TNET - ADP
35%
Loosely correlated
-0.32%
BBSI - ADP
35%
Loosely correlated
-1.96%
MAN - ADP
34%
Loosely correlated
+1.59%
NSP - ADP
33%
Loosely correlated
+0.79%
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