What does Automatic Data Processing (ADP) expect in Q2 results?

Automatic Data Processing, Inc. ADP is expected to release its second-quarter fiscal 2022 results on Jan. 26, before markets open.

Let’s see how things went for this announcement.

Expectations this time around

Zacks’ consensus estimate for second-quarter revenue is $3.98 billion, indicating growth of 7.7% from the figure reported a year ago.

The consensus mark for Employer Services revenue is set at $2.65 billion, implying growth of 5.6% over the reported figure for the prior year quarter. The increase was likely driven by growth in new business bookings. The consensus estimate for PEO services revenue is pegged at $1.34 billion, indicating 12.9% year-over-year growth. The rise was likely driven by an increase in the average number of construction workers paid by PEO Services.

The consensus rating for interest on funds held for client revenue is set at $104 million.

The consensus earnings estimate is $1.63 per share, implying 7.2% year-over-year growth.

What our model says

Our proven model does not conclusively predict an increase in profits for automatic data processing this time around. The combination of a positive ESP Earnings and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating gains. But it is not the case here. You can discover the best stocks to buy or sell before they’re flagged with our Income ESP Filter.

Automatic Data Processing has an ESP of 0.00% and a Zacks Rank #3.

Automatic Data Processing, Inc. Prize and EPS Surprise

Automatic Data Processing, Inc. price-eps-surprise | Automatic Data Processing, Inc. Quote

Actions to Consider

Here are some actions from the wider Zacks Business services sector that investors can consider, as our model shows that they have the right combination of elements to beat on the results of the fourth quarter of 2021:

Clean ports (HLC) has a +7.20% win ESP and a #2 Zacks rank. You can see the full list of today’s Zacks #1 Rank stocks here.

Clean Harbors has an expected profit growth rate of 3.4% for the current year. The company has an earnings surprise for the last four quarters of 50.5% on average.

Shares of Clean Harbors have jumped 13.9% over the past year.

set of facts FDS has a +0.29% win ESP and a #2 Zacks rank.

FactSet forecasts a 10.6% profit growth rate for the current year. The company has an earnings surprise for the last four quarters of 3.3% on average.

FactSet shares have jumped 32.3% over the past year. The company forecasts a long-term earnings growth rate of 8.4%.

Genpact (g) has a +0.39% win ESP and a #2 Zacks rank.

Genpact forecasts a profit growth rate of 9.7% for the current year. The company has an earnings surprise for the last four quarters of 15.1% on average.

Genpact shares have jumped 21.7% over the past year. The company’s long-term earnings growth rate is projected at 14.8%.

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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.

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