Payroll and HR services provider Automatic Data Processing (NASDAQ: ADP) will be announcing earnings results this Wednesday before the bell. Here’s what investors should know.
ADP beat analysts’ revenue expectations last quarter, reporting revenues of $5.36 billion, up 6.2% year on year. It was a satisfactory 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 5.4% year on year, in line with the 5.7% 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 to 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 Q1 results, giving us a hint as to what we can expect. SS&C delivered year-on-year revenue growth of 8.8%, beating analysts’ expectations by 1.1%, and Equifax reported revenues up 14.3%, topping estimates by 2%. SS&C traded down 4% following the results while Equifax was also down 10%.
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 13.1% on average over the last month. ADP is down 3.3% during the same time and is heading into earnings with an average analyst price target of $256.47 (compared to the current share price of $198.73).
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