6 Reasons to Bet on Automatic Data Processing (ADP) Stock
Automatic Data Processing, Inc. ADP is a cloud-based human capital management (“HCM”) solutions provider that has performed well over the past year and has the potential to maintain momentum. If you haven’t yet benefited from its stock price appreciation, it’s time to add the stock to your portfolio.
Let’s take a look at the factors that make the stock an attractive choice
an overachiever: A snapshot of the company’s price trend reveals that its shares have jumped 44% in the past year, compared to a 36.4% rise in the industry it belongs to.
Automatic Data Processing, Inc. Price
Automatic Data Processing, Inc. Awards | Automatic Data Processing, Inc. Quote
Solid rank: ADP currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities. You can see the full list of today’s Zacks #1 Rank stocks here.
Northward revisions to estimates: An estimate for fiscal year 2022 has moved north in the past 60 days against no southward revision. The Zacks consensus estimate for fiscal 2022 earnings has risen slightly over the past 60 days.
History of positive results: ADP has an impressive track record of earnings surprises. The company has exceeded Zacks’ consensus estimate for the past four quarters, generating a surprise profit of 9.7% on average.
Strong growth prospects: Zacks consensus estimate for fiscal 2022 earnings is pegged at $6.77, reflecting 12.5% year-over-year growth. Earnings are expected to grow by 10.3% in fiscal 2023. The company’s expected long-term earnings per share (EPS) growth rate is set at 12%.
Determining factors: ADP has been able to accelerate DataCloud penetration and increase investment in inside sales, mid-market migrations, and service alignment initiatives through its ongoing transformation initiatives. Through these initiatives, the company continues to innovate, improve its operations, increase its margins and strengthen its innovation capabilities.
The recent acquisition of Integrated Design is expected to expand the reach of the company’s comprehensive HCM and Workforce Management solutions to industries facing complex compliance challenges and reporting requirements. Acquisitions such as Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company have strengthened ADP’s customer base and are helping it expand its business into international markets. The company continues to seek acquisitions that strategically fit its overall business mix and are easy to integrate over the long term.
Other actions to consider
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Avis Budget shares have jumped 392.3% over the past year. It has long-term earnings growth of 19.4%. CAR sports a No. 1 Zacks rank.
Cross Country Healthcare has an expected earnings growth rate of 500% for 2021. CCRN has a four-quarter earnings surprise of 75%, on average.
Shares of Cross Country Healthcare have jumped 156.3% over the past year. It shows long-term earnings growth of 21.5%. CCRN sports a #1 Zacks rank.
Accenture forecasts a profit growth rate of around 19.8% for the current year. It has a surprise on earnings for the last four quarters of 5.3% on average.
Accenture shares have jumped 42.5% over the past year. It has a long-term earnings growth of 10%. ACN sports a #1 Zacks rank.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.