Latest news with #AutomaticDataProcessing
Yahoo
15 hours ago
- Business
- Yahoo
UBS Affirms ‘Neutral' Rating on Automatic Data Processing (ADP) Following Guidance Adjustment
Automatic Data Processing, Inc. (NASDAQ:ADP) is one of the 13 best software stocks to buy now. On June 13, UBS reiterated a 'Neutral' rating on the stock but cut the price target to $315 from $323. The adjustment follows significant updates at the company's investor day in New York City. A trader in a busy trading room, surrounded by real-time market data and automated execution services. The software company revised its revenue growth expectations to 6% and 7% at the event. Management also reiterated they expect earnings per share to grow by between 9% and 11%, a 200 basis point reduction from 2021 predictions. Automatic Data Processing's Professional Employer Organization Segment accounts for about 35% of total revenue and is expected to grow by 6% and 8%, down from a previous forecast of 10% and 12%. UBS remains optimistic about the company's long-term prospects, as it has a 15% market share in the human capital management market. Consequently, it is expected to generate significant value given that the total addressable market is expected to expand to $180 billion from $175 billion. Nevertheless, it maintains a neutral stance as it monitors the impact of technology and distribution investments on margins. Automatic Data Processing, Inc. (NASDAQ:ADP) is a software application company that provides solutions that automate data handling, particularly through software and services, to streamline business operations. While we acknowledge the potential of ADP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 12 Best Healthcare Stocks to Buy Now and 10 Stocks Analysts Are Upgrading Today. Disclosure: None.
Yahoo
27-05-2025
- Business
- Yahoo
Are Strong Financial Prospects The Force That Is Driving The Momentum In Automatic Data Processing, Inc.'s NASDAQ:ADP) Stock?
Automatic Data Processing (NASDAQ:ADP) has had a great run on the share market with its stock up by a significant 10% over the last month. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. In this article, we decided to focus on Automatic Data Processing's ROE. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Put another way, it reveals the company's success at turning shareholder investments into profits. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Automatic Data Processing is: 68% = US$4.0b ÷ US$5.9b (Based on the trailing twelve months to March 2025). The 'return' is the yearly profit. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.68 in profit. View our latest analysis for Automatic Data Processing Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. Firstly, we acknowledge that Automatic Data Processing has a significantly high ROE. Additionally, the company's ROE is higher compared to the industry average of 20% which is quite remarkable. Probably as a result of this, Automatic Data Processing was able to see a decent net income growth of 11% over the last five years. We then performed a comparison between Automatic Data Processing's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 11% in the same 5-year period. Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for ADP? You can find out in our latest intrinsic value infographic research report. Automatic Data Processing has a significant three-year median payout ratio of 59%, meaning that it is left with only 41% to reinvest into its business. This implies that the company has been able to achieve decent earnings growth despite returning most of its profits to shareholders. Moreover, Automatic Data Processing is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 59%. Therefore, the company's future ROE is also not expected to change by much with analysts predicting an ROE of 75%. On the whole, we feel that Automatic Data Processing's performance has been quite good. Especially the high ROE, Which has contributed to the impressive growth seen in earnings. Despite the company reinvesting only a small portion of its profits, it still has managed to grow its earnings so that is appreciable. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
Automatic Data Processing (NasdaqGS:ADP) Expands CPR Education With American Heart Association Partnership
Automatic Data Processing recently announced a partnership with the American Heart Association to integrate CPR training into its mobile app, aiming to boost health readiness among its workforce. This initiative aligns with the company's broader commitment to health and safety, reinforcing its corporate responsibility ethos. Over the past month, ADP's stock price moved up by 10%, amidst a generally positive market trend with major indexes like the S&P 500 experiencing growth. ADP's recent earnings report, showcasing a rise in sales and revenue, may have contributed positively, aligning well with the broader market's upward momentum. Buy, Hold or Sell Automatic Data Processing? View our complete analysis and fair value estimate and you decide. Trump's oil boom is here — pipelines are primed to profit. Discover the 22 US stocks riding the wave. The recent partnership between Automatic Data Processing (ADP) and the American Heart Association, targeting enhanced health readiness through CPR training integration, aligns well with ADP's ongoing commitment to corporate responsibility. This initiative could potentially influence ADP's long-term narrative positively by strengthening workforce engagement and satisfaction, possibly leading to higher productivity and operational efficiency. Such efforts might indirectly support revenue growth by sustaining a motivated workforce and possibly reducing turnover. Over the past five years, ADP has delivered a total shareholder return of 165.98%, indicative of substantial capital appreciation and consistent dividend payments. In comparison, over the past year, ADP's return surpassed the US Professional Services industry average of 12%, reflecting relative strength in performance. This reflects the company's robust execution of its growth strategy and ability to maintain momentum despite market fluctuations. With respect to revenue and earnings, the introduction of new health initiatives could enhance employee loyalty and efficiency, indirectly contributing to more stable revenue streams. While short-term earnings forecasts remain reliant on current product expansions and strategic partnerships, sustaining employee-focused programs might bolster long-term financial performance. The current share price of $308.19 is closely aligned with the consensus price target of $309.08, signaling that the stock is deemed fairly valued by analysts. This alignment suggests limited immediate upside but highlights confidence in the company's revenue and earnings projections, assuming continued execution of strategic initiatives. Our comprehensive valuation report raises the possibility that Automatic Data Processing is priced lower than what may be justified by its financials. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NasdaqGS:ADP. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
Yahoo
17-05-2025
- Business
- Yahoo
Automatic Data Processing, Inc.'s (NASDAQ:ADP) large institutional owners must be happy as stock continues to impress, up 3.8% over the past week
Significantly high institutional ownership implies Automatic Data Processing's stock price is sensitive to their trading actions 48% of the business is held by the top 25 shareholders Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. A look at the shareholders of Automatic Data Processing, Inc. (NASDAQ:ADP) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 83% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company. Last week's 3.8% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 29% and last week's gain was the icing on the cake. In the chart below, we zoom in on the different ownership groups of Automatic Data Processing. Check out our latest analysis for Automatic Data Processing Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. We can see that Automatic Data Processing does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Automatic Data Processing, (below). Of course, keep in mind that there are other factors to consider, too. Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Automatic Data Processing. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 10%. Meanwhile, the second and third largest shareholders, hold 8.9% and 4.6%, of the shares outstanding, respectively. On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest. While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future. While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. Our most recent data indicates that insiders own less than 1% of Automatic Data Processing, Inc.. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$134m worth of shares (at current prices). Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling. The general public, who are usually individual investors, hold a 17% stake in Automatic Data Processing. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. While it is well worth considering the different groups that own a company, there are other factors that are even more important. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free. If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Jim Cramer on Automatic Data Processing (ADP): 'Is ADP a Head Fake or the Real Small Biz Signal?'
We recently published a list of . In this article, we are going to take a look at where Automatic Data Processing, Inc. (NASDAQ:ADP) stands against other stocks that Jim Cramer recently discussed. In a recent appearance on CNBC's Squawk on the Street, Jim Cramer discussed recent employment data which covered nonfarm payrolls, the unemployment rate, and other details. The figures revealed that nonfarm payrolls grew by 177,000 in April which handily beat economists' forecast of 133,000. Additionally, despite worries about a growth slowdown, recessionary fears, and high interest rates, April's unemployment rate sat unchanged at 4.2%. Cramer gushed about the data and shared that it was the only data that mattered when it came to considering whether there would be a recession. He commented: 'Really strong numbers and it's one of those this right now the President has that, uh, Truth Social squib, about the Fed should cut. I think the difficulty is a positive difficulty. These are really good numbers and it's not like they're red hot in terms of inflation. I like the fact that a lot of them we haven't seen layoffs yet, from severance, remember from government, that was minus 9,000. The healthcare's up, it's just a good number! I mean, it's a number you expect and like to see when we're, you know kind of worried about a recession! It's a take the recession off the table number!' While the CNBC host admitted that some regions of the economy were weak, he nevertheless remained optimistic: 'We're supposed to have a pullback. We're just not getting it. Look there are spots that are weak but they tend to be aligned with outfits that aren't doing that well. . . I like these numbers, they make me feel like that the President should have said, uh, it's going to make it so that we might not have to cut rates but hang in there. Maybe things will not be so good so. I mean what does he, don't box yourself Mr. President. . .' Another theme that Cramer has discussed quite a lot in his morning show this year is the rally in the European stock market. In an April appearance, he remarked 'I think a lot of people say you know what, I keep sending money over there, and I win. So I'm gonna keep sending money over there. Those economies are being juiced by a wartime. . you know they're spending a lot.' This time around, he pointed out that the US was back. 'You know everyone's still talking about the big European rally, said Cramer. He added: 'Hello? It's been a US rally! Let's stop it already. That European rally it occurred, dynamite, I'm going over to Europe, I'll check it out myself.' Cramer then continued to gush about the jobs report. In fact, he called the reports the North Star of investing: 'I hate to be so simpleminded, but I've done, for one of my books I did this thing about what is the one statistic that you need to know. Over the past forty years. And the statistic is, this Friday. Once a month, you need to know this number. And if this number is true, and you have good employment growth, then you can just take it to the next three weeks. . . .take anything negative off the table because this is the number that is the North Star.' To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC's Squawk on the Street aired on May 2nd. For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). Number of Hedge Fund Holders In Q4 2024: 57 Automatic Data Processing, Inc. (NASDAQ:ADP) is a business services provider that allows firms to make payments, manage human resources, and conduct other operations. Its shares have gained 6% year-to-date as the firm has benefited from beating analyst revenue estimates despite overall souring business sentiment. Cramer commented on the firm in the context of GoDaddy's recent results: '[On telling GDDY being a proxy for small business] I can, I had them on and I had to believe that somewhat of an execution issue. Again, by the way, they are fantastic, at what they do, so, if I didn't see the small business index and Paychex do so well, I would say this. This is kind of like ADP. I mean was ADP a head fake? Was it a misdirection play yesterday?' Overall, ADP ranks 1st on our list of stocks that Jim Cramer recently discussed. While we acknowledge the potential of ADP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ADP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
