- ADP’s fourth-quarter adjusted EPS was $2.26, beating both the previous year’s $2.09 and the estimated $2.23.
- Total revenue increased 7.5% year-over-year to $5.13 billion, surpassing the $5.04 billion forecast.
- Employer services revenue reached $3.47 billion, a 7.7% increase year-over-year, outpacing the estimated $3.41 billion.
- PEO services revenue grew by 7.2% year-over-year to $1.66 billion, exceeding the estimate of $1.63 billion.
- Pretax profit rose 9.3% year-over-year to $1.19 billion, slightly above the forecast of $1.18 billion.
- Employer services pretax earnings were $1.16 billion, marking a 9.2% rise from the previous year, and better than the expected $1.09 billion.
- The pretax margin for employer services increased to 33.5% from the previous year’s 33%, above the estimated 32% margin.
- ADP’s 2026 forecast predicts an adjusted EPS growth of 8% to 10% and revenue growth of 5% to 6%.
- Current analyst ratings consist of 3 buys, 14 holds, and 1 sell.
Automatic Data Processing on Smartkarma
Analyst coverage of Automatic Data Processing on Smartkarma shows a positive outlook by Baptista Research. In their report titled “ADP Inc.: Integration & Strategic Partnerships As a Solid Groundwork For Future Growth Opportunities!“, they highlight the company’s solid financial performance in the third quarter of fiscal year 2025. Automatic Data Processing, Inc. demonstrated robust capabilities with a 6% increase in revenue, a 10 basis point rise in adjusted EBIT margin, and a 6% growth in adjusted EPS, particularly in its U.S. portfolio across small business, mid-market, enterprise, and compliance solutions offerings.
Baptista Research‘s analysis continues with their report “Automatic Data Processing (ADP): Here Are the 6 Key Drivers Shaping Its Performance for 2025 & Beyond! – Major Drivers”, emphasizing ADP’s strong results in the second quarter of fiscal year 2025. The report mentions an 8% revenue increase, 60 basis points expansion in adjusted EBIT margin, and a 10% growth in adjusted EPS. The performance reflects solid demand across their Employer Services (ES) and Professional Employer Organization (PEO) segments, with strengths in HR outsourcing, compliance, and enterprise businesses. The report also delves into evaluating various factors influencing the company’s price and conducting an independent valuation using a Discounted Cash Flow (DCF) methodology.
A look at Automatic Data Processing Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 3 | |
| Growth | 4 | |
| Resilience | 4 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Automatic Data Processing, Inc. is a global provider of business outsourcing solutions, offering a wide range of human resource, payroll, tax, and benefits administration services. According to Smartkarma Smart Scores, the company shows a positive long-term outlook, scoring well in Growth, Resilience, and Dividend factors. This indicates strong potential for expansion and stability in the future. While the Value and Momentum scores are slightly lower, the overall positive assessment suggests that Automatic Data Processing is positioned well for sustained success in the business outsourcing sector.
As a company known for providing solutions to various industries, including auto, truck, motorcycle, marine, and recreational vehicle dealers, Automatic Data Processing demonstrates a diverse portfolio of services. With solid scores in Growth and Resilience, investors may view the company as a reliable choice for long-term investment opportunities. The Dividend score also adds to the appeal, indicating a potential for consistent returns. While improvements in Value and Momentum could further enhance its overall performance, Automatic Data Processing‘s overall outlook appears promising based on the Smartkarma Smart Scores assessment.
Disclaimer: This article by Smartkarma is general in nature and 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. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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