Abhoy Sarkar's Avatar
published in Blogs
Jul 31, 2022

ADP (ADP, $241.12) beats fiscal Q4 expectations

Automatic Data Processing, Inc. reported fourth-quarter fiscal 2022 results that surpassed the Zacks Consensus Estimate.

The human resources company’s adjusted earnings in the quarter came in at $1.50 per share, exceeding the Zacks Consensus Estimate by 1.4%.

Revenues rose +10.5% from the year-ago quarter to $4.13 billion, beating the consensus estimate by 1.8%.

The company’s employer Services segment’s revenues climbed +8% from the year-ago quarter to $2.7 billion, with pays per control rising +7% year over year.

PEO Services revenues grew +16% year over year to $1.41 billion. Average worksite employees paid by PEO Services grew +14% to  704,000.

Interest on funds held for clients rose +23% to $127 million, and average client funds balances grew 12% to $32.8 billion. Average interest yield on client funds widened 10 basis points to 1.5%.

Looking ahead, ADP expects full-fiscal year 2023 revenues to grow in the 7-9% range (with employer Services revenues growth of 6-8% and PEO Services revenues expansion  at 10-12% ranges).The company projects 13-16% growth in adjusted earnings per share. Adjusted effective tax rate is estimated to be around 23%. 

Related Ticker: ADP

ADP in upward trend: price may jump up because it broke its lower Bollinger Band on April 25, 2023

ADP may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 34 cases where ADP's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on May 25, 2023. You may want to consider a long position or call options on ADP as a result. In of 101 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ADP advanced for three days, in of 344 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 71 cases where ADP's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for ADP turned negative on May 25, 2023. 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 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .

ADP moved below its 50-day moving average on May 24, 2023 date and that indicates a change from an upward trend to a downward trend.

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 .

The Aroon Indicator for ADP entered a downward trend on May 05, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

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 81, placing this stock better than average.

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 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: P/B Ratio (23.529) is normal, around the industry mean (7.865). P/E Ratio (26.882) is within average values for comparable stocks, (28.072). Projected Growth (PEG Ratio) (2.300) is also within normal values, averaging (1.980). Dividend Yield (0.022) settles around the average of (0.037) among similar stocks. ADP's P/S Ratio (5.171) is slightly higher than the industry average of (1.517).

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 6.68B. The market cap for tickers in the group ranges from 114K to 88.41B. ADP holds the highest valuation in this group at 88.41B. The lowest valued company is FRSI at 114K.

High and low price notable news

The average weekly price growth across all stocks in the Personnel Services Industry was -1%. For the same Industry, the average monthly price growth was -1%, and the average quarterly price growth was -9%. FTRS experienced the highest price growth at 36%, while PIXY experienced the biggest fall at -27%.

Volume

The average weekly volume growth across all stocks in the Personnel Services Industry was 104%. For the same stocks of the Industry, the average monthly volume growth was 61% and the average quarterly volume growth was 264%

Fundamental Analysis Ratings

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

Valuation Rating: 41
P/E Growth Rating: 57
Price Growth Rating: 57
SMR Rating: 53
Profit Risk Rating: 80
Seasonality Score: 5 (-100 ... +100)
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