Features of Zacks Investment Ideas: Automatic data processing, TriNet Group and Paychex

For immediate release

Chicago, IL – December 10, 2021 – Today Zacks Investment Ideas highlights the following features: Automatic Data Processing, Inc. ADP, TriNet Group, Inc. TNET and Paychex, Inc. PAYX.

Complete your paycheck with these 3 payroll providers

The human capital management (HMC) market has undergone an incredible transformation over the past decade as standard human resource functions have evolved. Traditional HR departments such as payroll, recruiting, and performance management have become opportunities for companies to drive productivity and business value.

Technology has drastically changed almost every market for the better, and HCM is no exception. Conventional HR operations are now streamlined, allowing businesses to take advantage of data analytics and make better decisions. Advanced technologies have rapidly automated business operations, with artificial intelligence and data automation enabling companies to capitalize on the value of their workforce.

Rather than seeing the HCM as just a cost of doing business, companies today see it as a vital asset whose value can be maximized. A robust HCM solution not only helps companies attract and hire talent, but also retain and maintain their employees by providing them with growth opportunities. Hiring the right company that provides these solutions allows users to proactively plan for succession in leadership and other important positions.

Zacks’ outsourcing industry contains some of the best talent and payroll management vendors and is currently ranked in the top 37% of 253 industry groups. By digging a little deeper, this industrial group outperformed the market this year with a return of 29.43%. Historical studies have shown that about half of future appreciation in a stock’s price is due to its industry consolidation.

With today’s Unemployment Claims Report showing the lowest number of initial claims in over 50 years, the services provided by these three outsourcing leaders are in greater demand than ever. The Outsourcing Industry Group contains the three stocks which we will discuss below.

Automatic data processing

Automatic Data Processing is a global provider of HCM solutions and has been instrumental in business process outsourcing. ADP provides services to businesses of all sizes, providing retirement recruiting, payroll, benefits and record keeping services. ADP seeks to educate and empower its clients while providing complex tools for talent management, compensation and succession planning.

ADP, a stock of Zacks # 2 (Buy), has outperformed its industry this year as the company enjoys a dominant position in the HCM market. A solid business model as well as a number of strategic takeovers have enabled the company to strengthen its position despite being in a competitive space.

Automated Data Processing has achieved record profits in each of the past seventeen quarters. ADP last reported EPS in October for the previous quarter of $ 1.65, a surprise of + 10.74% from estimates. The company has averaged a 9.65% positive surprise over the past four quarters, supporting the stock’s 33% advance this year.

What the Zacks model reveals

Zacks Earnings ESP (Expected Surprise Prediction) seeks to find companies that have recently seen positive earnings estimate review activity. Stocks that exhibit this activity with a Zacks # 3 rank or better produced a positive surprise 70% of the time. With a current earnings ESP of + 0.75%, our model predicts a pace for ADP for the upcoming earnings announcement.

Analysts covering ADP have increased their annual profit estimates by 1.81% in the past 60 days. The company is now expected to generate annual EPS of $ 6.76, up 12.29% from last year. ADP to report on January 26e, 2022.

TriNet Group

TriNet Group is a provider of a complete human resources solution for small and medium businesses. TNET offers tax administration, payroll, performance management, compensation consulting and benefit plans. Based in San Leandro, Calif., The company has clients in various industries such as marketing and advertising, venture capital, life sciences, financial services and technology.

TNET is a No.2 buy from Zacks and is trading at a relatively attractive P / E of 19.3 compared to the industry average of 21.13. The company last reported EPS of $ 1.31 in October, a surprise of + 59.76% from consensus. TNET has a surprise average profit over the last four quarters of 54.43% and has beaten estimates in each of the last seven quarters.

Analysts agree on the earnings revisions and have increased their TNET estimates by 9.01% in the past 60 days, reaching annual EPS of $ 5.08. If achieved, TriNet will generate 14.41% growth over 2020 EPS.


PAYX is a leader in the outsourcing industry and provides human resources, payroll and benefits to small and medium businesses. Based in Rochester, NY, Paychex’s offerings also include insurance and retirement, tax administration, and employee payment services.

PAYX continues to impress in terms of revenue growth, with analysts anticipating sales of $ 4.39 billion this year, an increase of 8.23% from 2020. Sales notably increased at a growth rate annual compound over 5 years of 6.5%.

PAYX has also amassed a strong track record of earnings surprises, beating estimates in each of the past seven quarters. The company recently reported EPS of $ 0.89 in September, a surprise of + 9.88% from consensus. With an average surprise of 7.8% over the last four quarters, it’s not hard to see why the stock has risen more than 32% since the start of the year.

Zacks’ consensus estimate for full-year EPS is $ 3.46, which represents a growth rate of 13.82% from 2020. PAYX is expected to release its quarterly results later this month- here on December 22.sd.

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Paychex, Inc. (PAYX): Free Stock Analysis Report

Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report

TriNet Group, Inc. (TNET): Free Stock Analysis Report

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