- ADP’s adjusted EPS for the second quarter was $2.35, which exceeded both last year’s $2.13 and the estimated $2.30.
- Revenue for the quarter reached $5.05 billion, marking an 8.1% increase year-over-year, and surpassing the estimated $4.97 billion.
- Employer services revenue grew by 8.4% to $3.39 billion, beating the estimated $3.34 billion.
- PEO (Professional Employer Organization) services revenue rose by 7.6% to $1.66 billion, slightly above the estimated $1.63 billion.
- Employer services reported an 8% increase in new bookings.
- Pretax profit for the quarter was $1.26 billion, reflecting a 10% year-over-year increase, surpassing the estimate of $1.23 billion.
- Employer services’ pretax earnings were $1.18 billion, up 11% year-over-year, exceeding the estimated $1.11 billion.
- The employer services pretax margin improved to 34.9% compared to last year’s 34%, outpacing the estimated 33.4%.
- For the full year, ADP projects adjusted EPS growth of 7% to 9%.
- ADP forecasts revenue growth of 6% to 7% for the year.
- The company anticipates employer services new bookings will increase by 4% to 7%.
- The company’s stock has 3 buy ratings, 16 hold ratings, and 1 sell rating based on the gathered consensus.
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Automatic Data Processing on Smartkarma
Analysts on Smartkarma, such as Baptista Research, are bullish on Automatic Data Processing (ADP) based on recent research reports. In their report titled “Expansion Through Acquisitions & Partnerships To Up Their Top-Line! – Major Drivers,” Baptista Research highlights ADP’s strong start to fiscal year 2025, with a 7% revenue increase and a 12% growth in adjusted earnings per share. The report delves into the company’s strategic advancements, including a 130-basis-point expansion in adjusted EBIT margin, and conducts an independent valuation using a Discounted Cash Flow methodology.
Another report by Baptista Research, titled “How Are They Leveraging Generative AI for Enhanced Services! – Major Drivers,” analyzes ADP’s fourth quarter fiscal 2024 earnings. Despite potential future uncertainties linked to macroeconomic conditions, the report presents a positive outlook for ADP. The company reported a 6% revenue growth in the fourth quarter and an 80 basis points expansion in adjusted EBIT margin. Overall, ADP’s performance for fiscal 2024 showcased strong growth and operational successes, reinforcing analyst confidence in the company’s future prospects.
A look at Automatic Data Processing Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 3 | |
| Growth | 4 | |
| Resilience | 3 | |
| Momentum | 4 | |
| 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 positioned for a positive long-term outlook, according to Smartkarma Smart Scores. With an overall favorable rating, the company’s strengths lie in its solid Growth and Momentum scores, indicating potential for expansion and positive market performance. This suggests that Automatic Data Processing may continue to experience growth and maintain a strong market presence in the future.
While the Value and Resilience scores are somewhat moderate, the Dividend score falls in the middle range. Despite this, the company’s diverse business outsourcing solutions, including human resources, payroll, and benefits administration services, provide a stable foundation for future growth. Automatic Data Processing‘s ability to adapt to market changes and deliver reliable services positions it well for long-term success.
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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