Why Is Software Megacap ADP's Stock Trading Higher Today?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 01 2024
0mins
Should l Buy ADP?
Source: Benzinga
- Financial Performance: ADP reported Q3 2024 revenues of $5.25 billion, beating analyst expectations, with a 7% increase year-over-year.
- Earnings and Margins: Quarterly adjusted EPS was $2.88, surpassing analyst estimates, while Adjusted EBIT increased by 12% to $1.5 billion with a margin increase of 140 bps to 29.3%.
- Net Earnings: Net earnings rose by 14% Y/Y to $1.2 billion, and adjusted net earnings increased by 13% Y/Y to $1.2 billion.
- Outlook and Financial Position: ADP reiterated its revenue growth outlook for FY24 and held $3.3 billion in cash and equivalents as of March 31, 2024.
- Stock Performance and Investment Opportunities: ADP stock gained 12% in the last 12 months, and investors can access it through ETFs like DIVL and PCGG.
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Analyst Views on ADP
Wall Street analysts forecast ADP stock price to rise
12 Analyst Rating
2 Buy
7 Hold
3 Sell
Hold
Current: 204.890
Low
230.00
Averages
276.83
High
332.00
Current: 204.890
Low
230.00
Averages
276.83
High
332.00
About ADP
Automatic Data Processing, Inc. is a provider of cloud-based human capital management (HCM) solutions. Its segments include Employer Services and Professional Employer Organization (PEO). Its Employer Services segment serves clients ranging from single-employee small businesses to large enterprises with tens of thousands of employees around the world, offering a range of technology-based HCM solutions, including its cloud-based platforms, and human resource outsourcing (HRO) (other than PEO) solutions. Its offerings include Payroll Services, Benefits Administration, Talent Management, HR Management, Workforce Management, Compliance Services, Insurance Services and Retirement Services. Its PEO business, called ADP TotalSource, provides clients with guidance, technology, comprehensive employee benefits, risk management, safety, and workers’ compensation program. Its compensation management software supports the compensation planning needs.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Release Frequency and Transparency: The NER Pulse is published every Tuesday at 8:15 a.m., offering 12 weeks of historical data to ensure market participants can access the latest employment dynamics, thereby enhancing decision-making transparency.
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- ETF Trading Mechanism: Exchange-traded funds (ETFs) trade like stocks, where investors buy and sell 'units' that can be created or destroyed based on demand, impacting liquidity and market performance.
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- AI and Productivity: Despite the goal of artificial intelligence to enhance efficiency, recent data indicates that workers using generative AI report feeling less productive.
- Worker Sentiment: The findings suggest a disconnect between the intended benefits of AI tools and the actual experiences of employees in their daily work.
See More
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- Job Security Concerns: According to ADP Research, only 22% of global workers strongly agreed that their jobs are safe from elimination, with anxiety particularly pronounced among lower-paid, repetitive task workers, indicating a pressing need for employers to rethink talent strategies to enhance employee confidence.
- AI Usage and Engagement: The survey found that employees who frequently use AI are more likely to feel confident about job security, with 53% of workers fully engaged when they perceive employer investment, compared to only 12% who feel disengaged without such investment, highlighting opportunities for employers to enhance skill development.
- Challenges of a Multi-Generational Workforce: For the first time, five generations are working together, with only 18% of workers aged 55 to 64 and 19% of those 65+ feeling they have the skills to advance, compared to 29% of younger workers, suggesting a need for targeted skill development across age groups.
- Prevalence of Unpaid Work: ADP's research indicates that 62% of workers put in up to five hours of unpaid work each week, while 38% exceed six hours, reflecting significant pressure on employees regarding work-life balance, necessitating employer action to improve efficiency and employee satisfaction.
See More
U.S. Private Sector Job Growth Slows
- Job Growth Data: For the four weeks ending March 7, 2026, U.S. private employers added an average of 10,000 jobs per week, indicating a moderate growth trend in the labor market, although changes from previous weeks were minimal.
- Four-Week Moving Average: The NER Pulse data shows a moving average of 9,000 jobs for the week ending February 28 and 14,750 for February 21, suggesting fluctuations in job growth that could impact confidence in economic recovery.
- Data Release Frequency: The NER Pulse is published every Tuesday at 8:15 a.m., providing estimates of week-over-week employment changes based on ADP's high-frequency data, ensuring timeliness and accuracy to support decision-making for policymakers and businesses.
- Future Release Schedule: The next NER Pulse will be released on April 7, 2026, with ADP Research collaborating with the Stanford Digital Economy Lab to enhance work productivity through data-driven insights, reflecting ADP's leadership in employment data.
See More
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- Job Growth Data: For the four weeks ending March 7, 2026, U.S. private employers added an average of 10,000 jobs per week, indicating stability in the labor market, although the growth rate has slowed compared to previous weeks.
- Data Source and Adjustments: These figures come from the NER Pulse, which utilizes ADP's high-frequency data and is seasonally adjusted; despite a two-week lag, they provide crucial insights into real-time employment trends.
- Release Frequency and Transparency: The NER Pulse is published every Tuesday at 8:15 a.m., offering 12 weeks of historical data to ensure market participants can access the latest employment dynamics, thereby enhancing decision-making transparency.
- Future Release Plans: The next NER Pulse will be released on April 7, 2026, with ADP Research collaborating with the Stanford Digital Economy Lab to provide data-driven insights that help businesses and policymakers make more informed decisions.
See More
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- Increase in Refund Amounts: As of March 13, the average tax refund for individual filers reached $3,623, marking a 10.8% increase from last year's $3,271, indicating that many households are benefiting despite economic pressures.
- Filing Season Activity: The IRS has received approximately 69.7 million individual returns so far, with expectations to reach 164 million by the April 15 deadline, reflecting robust filing activity that may influence future fiscal policies.
- Impact of Rising Gas Prices: The national average gasoline price surged to $3.91 per gallon, up from $2.93 a month ago, with economists warning that this could offset some of the economic relief provided by tax refunds, particularly affecting low-income families.
- Policy Context: The Trump administration claims this will be the
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- Technical Analysis Tool: Comparing the latest stock price to the 200-day moving average provides investors with valuable insights for technical analysis, aiding in trend assessment and potential buying opportunities.
- ETF Trading Mechanism: Exchange-traded funds (ETFs) trade like stocks, where investors buy and sell 'units' that can be created or destroyed based on demand, impacting liquidity and market performance.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in ETF shares outstanding highlights those experiencing significant inflows (new units created) or outflows (old units destroyed), assessing their impact on underlying assets and market trends.
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