6 Reasons to Buy Automatic Data Processing (ADP) Shares Now
A prudent investment decision is to buy well-timed performing stocks while selling risky ones. A rising stock price and strong fundamentals signal a bull run in a stock.
Automatic Data Processing, Inc. ADP has performed exceptionally recently and has the potential to maintain momentum in the near term. So if you haven’t yet benefited from the stock price appreciation, it’s time to add the stock to your portfolio.
What makes automatic data processing an attractive choice?
an overachiever: A look at the company’s price trend reveals that the stock has had an impressive run on the stock market over the past year. Automatic data processing shares have gained 12.3% over the past year, outpacing the 10% growth of industry it belongs to.
Image source: Zacks Investment Research
Solid Zacks Rank: Automatic Data Processing has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the full list of today’s Zacks #1 Rank stocks here.
Northward revisions to estimates: The direction of the estimate revisions serves as an important indicator when it comes to the price of a stock. Over the past 90 days, Zacks’ consensus estimate for 2022 automatic data processing earnings has climbed 2.2% to $6.97 per share.
History of positive results: Automatic data processing has an impressive track record of earnings surprises. The company has delivered a 6.2% profit surprise over the past four quarters, on average.
Earnings expectations: Earnings growth and stock price gains are often used as indicators of a company’s prospects. For the second quarter of 2022, automatic data processing results are expected to grow by 22.7%. For all of 2022 and 2023, the company’s earnings are expected to grow 15.8% and 11.2%, respectively, year-over-year. The company has a long-term earnings growth rate of 12%.
Growth factors: Automatic data processing continues to enjoy a dominant position in the human capital management market thanks to strategic acquisitions such as Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company. It has a solid business model, high recurring revenue, good margins, strong customer loyalty and low capital expenditures. In addition, it continues to innovate, improve its operations and invest in its ongoing transformation efforts.
Other actions to consider
A few other stocks in the broader Business servicessector that investors can consider are Cross Country Health Care CCRN, Georgiartner that and Budget Reviews CAR, each sporting a Zacks rank #1 at present.
Cross Country Healthcare has an expected earnings growth rate of 54.2% for the current year. CCRN has a surprise on earnings for the last four quarters of 29.2% on average.
Cross Country Healthcare has a long-term earnings growth rate of 6.9%.
Gartner shares have gained 10.6% over the past year. IT has generated a surprise on the profits of the last four quarters of 24.2% on average.
Gartner’s Zacks consensus estimate for earnings for the current year is up 13.6% over the past 90 days.
Avis Budget forecasts a profit growth rate of 59.8% for the current year. CAR recorded a four-quarter earnings surprise of 102.1%, on average.
Avis Budget has a long-term earnings growth rate of 19.4%.
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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.