Payroll and HR services provider Automatic Data Processing (NASDAQ: ADP) will be announcing earnings results this Wednesday before market hours. Here’s what you need to know.
ADP beat analysts’ revenue expectations last quarter, reporting revenues of $5.94 billion, up 7% year on year. It was a strong quarter for the company, with a beat of analysts’ EPS estimates.
Is ADP a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting ADP’s revenue to grow 6.1% year on year, slowing from the 7.5% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. ADP has a history of exceeding Wall Street’s expectations.
Looking at ADP’s peers in the professional 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 10.3%, beating analysts’ expectations by 2.1%, and Equifax reported revenues up 10.6%, in line with consensus estimates. SS&C traded up 10.4% following the results while Equifax was down 5.3%.
Read our full analysis of SS&C’s results here and Equifax’s results here.
There has been positive sentiment among investors in the professional services segment, with share prices up 3.2% on average over the last month. ADP is up 13.7% during the same time and is heading into earnings with an average analyst price target of $256.87 (compared to the current share price of $255.82).
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