Payroll and HR services provider Automatic Data Processing (NASDAQ:ADP) will be reporting earnings this Wednesday before market open. Here’s what you need to know.
ADP beat analysts’ revenue expectations by 0.8% last quarter, reporting revenues of $5.55 billion, up 5.7% year on year. It was a satisfactory quarter for the company, with a decent beat of analysts’ EPS estimates. It reported 751,000 worksite employees, up 3.4% year on year.
Is ADP a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting ADP’s revenue to grow 5.5% year on year to $5.03 billion, in line with the 6.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.23 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. ADP has missed Wall Street’s revenue estimates twice over the last two years.
Looking at ADP’s peers in the data & business process services segment, some have already reported their Q2 results, giving us a hint as to what we can expect. SS&C delivered year-on-year revenue growth of 5.9%, beating analysts’ expectations by 1.5%, and TransUnion reported revenues up 9.5%, topping estimates by 3.7%. SS&C traded up 2.6% following the results while TransUnion was also up 5%.
Read our full analysis of SS&C’s results here and TransUnion’s results here.
There has been positive sentiment among investors in the data & business process services segment, with share prices up 2.3% on average over the last month. ADP’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $317.23 (compared to the current share price of $310).
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