- ADP has updated its fiscal year adjusted EPS forecast to a growth of 8% to 9%, slightly adjusting from the previous forecast of 7% to 9%.
- The company maintains its revenue growth forecast at 6% to 7% and expects employer services new bookings to increase by 4% to 7%.
- For the third quarter, ADP reported an adjusted EPS of $3.06, an increase from $2.88 in the previous year and above the estimated $2.96.
- Revenue for the third quarter reached $5.55 billion, representing a 5.7% year-over-year increase and slightly above the estimated $5.5 billion.
- Employer services revenue for the quarter was $3.77 billion, a 4.9% increase year-over-year, in line with estimates.
- PEO services revenue increased by 7.4% year-over-year to $1.79 billion, exceeding the estimate of $1.74 billion.
- Employer services new bookings rose by 5% in the third quarter.
- ADP’s pretax profit reached $1.62 billion, up 4.9% compared to last year, surpassing the estimate of $1.57 billion.
- Employer services pretax earnings were $1.50 billion, a 5.5% increase year-over-year, beating the estimate of $1.47 billion.
- The employer services pretax margin improved to 39.8%, compared to 39.6% last year, and above the estimated 38.9%.
- Peter Hadley, currently ADP’s Treasurer, has been appointed as the new Chief Financial Officer effective July 1, succeeding Don McGuire. Hadley has been with ADP since 2002, holding various senior leadership roles.
Automatic Data Processing on Smartkarma
Analyst coverage on Automatic Data Processing (ADP) on Smartkarma by Baptista Research highlights the company’s strong performance in fiscal year 2025. The second-quarter results showed an 8% revenue increase, a 60-basis-point expansion in adjusted EBIT margin, and a 10% growth in adjusted EPS. ADP’s Employer Services (ES) and Professional Employer Organization (PEO) segments experienced solid demand, particularly in HR outsourcing, compliance, and enterprise businesses. Baptista Research evaluates various factors influencing the company’s stock price and conducts an independent valuation using a Discounted Cash Flow (DCF) methodology.
Furthermore, Baptista Research also covers ADP’s expansion strategy through acquisitions and partnerships in another report. ADP’s fiscal year 2025 began strongly with a 7% revenue increase, a 12% growth in adjusted EPS, and a 130-basis-point expansion in adjusted EBIT margin. The company’s first-quarter results showcased significant growth and strategic advancements. By assessing different drivers impacting ADP’s top-line growth, Baptista Research aims to provide insights into the company’s future prospects and value, supporting investors in making informed decisions.
A look at Automatic Data Processing Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 3 | |
| Growth | 4 | |
| Resilience | 4 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.4 |
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., a global provider of business outsourcing solutions, presents a promising long-term outlook based on the Smartkarma Smart Scores. With a focus on growth, resilience, and momentum, the company is positioned to perform well in the market. The scores for Value and Dividend, though not the highest, still demonstrate a solid foundation for future potential. Automatic Data Processing‘s diverse range of services, including human resource, payroll, tax, and benefits administration solutions, along with its offerings for various industries like auto and marine dealers, enhance its overall outlook for sustainable growth.
Automatic Data Processing‘s strong Smart Scores in Growth, Resilience, and Momentum highlight its potential for continued success in the long term. As a global leader in business outsourcing solutions, the company’s ability to adapt to changing market dynamics and deliver consistent performance sets it apart. The scores for Value and Dividend, although not the highest, underscore Automatic Data Processing‘s overall stability and value proposition. With a wide range of services catering to different industries, including auto, truck, motorcycle, marine, and recreational vehicle dealers, the company is well-positioned to capitalize on future opportunities and maintain its competitive edge.
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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