Last Updated: 08 Nov 2024
Executive Summary
Automatic Data Processing Inc. (ADP) is a leading provider of human resources management software and services. The company has a strong financial position with a market capitalization of $124.2 billion and an EBITDA of $5.73 billion. ADP's trailing PE ratio of 32.53 is in line with the industry average, and the company's forward PE ratio of 30.67 suggests that analysts expect the company to continue to grow in the future. ADP's dividend yield of 0.0202% is below the industry average, but the company has a history of increasing its dividend payments.
Company Overview
ADP was founded in 1949 and is headquartered in Roseland, New Jersey. The company provides a wide range of HR services, including payroll processing, benefits administration, and HR consulting. ADP serves over 860,000 clients worldwide and has a workforce of over 60,000 employees.
Fundamental Analysis
ADP's financial performance has been strong in recent years. The company's revenue has grown from $17.9 billion in 2019 to $19.5 billion in 2023. ADP's net income has also grown, from $2.9 billion in 2019 to $3.5 billion in 2023. The company's profit margin has been relatively stable, averaging around 19.7% over the past five years.
ADP's return on assets (ROA) and return on equity (ROE) are both above the industry average. The company's ROA is 6.54%, compared to the industry average of 5.12%. ADP's ROE is 87.3%, compared to the industry average of 12.2%.
Technical Analysis
ADP's stock price has been trending higher in recent months. The stock price broke out of a resistance level at $290 in early 2023 and has since reached a new 52-week high of $306.71. The stock price is currently trading above its 50-day and 200-day moving averages, which is a bullish sign.
ADP's relative strength index (RSI) is currently at 65.38, which is in the overbought territory. This suggests that the stock may be due for a pullback in the short term. However, the overall trend for ADP's stock price is positive, and the stock is expected to continue to rise in the long term.
Short Term Outlook
ADP's stock price is expected to continue to rise in the short term. The stock price is trading above its key moving averages and the RSI is in the overbought territory. However, the stock may be due for a pullback in the short term.
Long Term Outlook
ADP's long-term outlook is positive. The company is a leader in the HR software and services industry and is well-positioned to continue to grow in the future. ADP's strong financial performance and positive analyst recommendations suggest that the stock is a good long-term investment.
Analyst Recommendations
Analysts are generally bullish on ADP's stock. The consensus analyst rating for ADP is "Buy." The average analyst target price for ADP is $294.91, which is 3.2% below the current stock price.
