Payroll and HR services provider Automatic Data Processing (NASDAQ: ADP) will be reporting earnings this Wednesday before market open. Here’s what investors should know.
ADP beat analysts’ revenue expectations by 1.9% last quarter, reporting revenues of $5.13 billion, up 7.5% year on year. It was a mixed quarter for the company, with a decent beat of analysts’ revenue estimates but revenue guidance for next quarter meeting analysts’ expectations. It reported 764,000 worksite employees, up 1.1% year on year.
Is ADP a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting ADP’s revenue to grow 6.2% year on year to $5.13 billion, in line with the 7.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.44 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. ADP has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 0.9% on average.
Looking at ADP’s peers in the data & business process services segment, some have already reported their Q3 results, giving us a hint as to what we can expect. TransUnion delivered year-on-year revenue growth of 7.8%, beating analysts’ expectations by 3.2%, and Equifax reported revenues up 7.2%, topping estimates by 1.4%. TransUnion traded up 6.1% following the results while Equifax’s stock price was unchanged.
Read our full analysis of TransUnion’s results here and Equifax’s results here.
Investors in the data & business process services segment have had steady hands going into earnings, with share prices up 1.3% on average over the last month. ADP is down 4.3% during the same time and is heading into earnings with an average analyst price target of $311.62 (compared to the current share price of $280.02).
When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
