Roseland, New Jersey-based Automatic Data Processing, Inc. (ADP) engages in the provision of cloud-based human capital management (HCM) solutions worldwide. With a market cap of $112.8 billion, Automatic Data Processing operates through Employer Services and Professional Employer Organization (PEO) segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," Automatic Data Processing fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the software application industry. It offers a wide range of human resource, payroll, tax, and benefits administration solutions.
Automatic Data Processing hit its all-time high of $278.24 in yesterday’s trading session before slightly pulling back. ADP stock has gained 12% over the past three months, outperforming the S&P 500 Index’s ($SPX) 4.3% gains during the same time frame.
Over the longer term, ADP gained 7.6% over the past 52 weeks, lagging behind SPX’s 22.2% gains during the same time frame. However, in 2024, ADP is up 18.1%, outpacing SPX’s 15.7% returns on a YTD basis.
To confirm the recent bullish trend, ADP has been trading above its 50-day and 200-day moving averages since mid-July.
Shares of Automatic Data Processing rose 1.9% after the release of its better-than-expected Q4 and full-year earnings on Jul. 31. It reported a robust 6.6% year-over-year growth in full-year revenue, reaching $19.2 billion. Its annual net earnings grew by an impressive 10% to $3.8 billion. The company also repurchased shares worth $1.2 billion during the previous fiscal year, demonstrating its commitment to shareholders.
Moreover, the management projects revenue growth between 5% and 6%, while EPS is anticipated to be between 9% and 11% for fiscal 2025, attracting investor attention.
Automatic Data Processing’s competitor, Workday, Inc. (WDAY), has underperformed ADP. WDAY gained 4.1% over the past 52 weeks and dipped 6.3% in 2024.
Among the 18 analysts covering the ADP stock, the consensus rating is a “Hold.” Although ADP is trading above its mean target price of $271.13, the Street-high target of $310 represents a potential upside of 12.6% from current price levels.
On the date of publication, Aditya Sarawgi 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.
