Stock of the Day

Automatic Data Processing (ADP)

$326.21

-$0.32 (-0.1%)

Market Cap: $132.42B

About Automatic Data Processing

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions.

Its offerings include payroll services, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solution to businesses through a co-employment model. This segment offers employee benefits, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. Automatic Data Processing, Inc. was founded in 1949 and is headquartered in Roseland, New Jersey.

Automatic Data Processing Bull Case

Here are some ways that investors could benefit from investing in Automatic Data Processing, Inc.:

• The current stock price is around $325, reflecting a strong performance and a recent 52-week high, indicating positive market sentiment.
• Automatic Data Processing, Inc. reported earnings per share of $3.06, surpassing analysts' expectations, which suggests robust financial health and effective management.
• The company has shown a year-over-year revenue growth of 5.7%, indicating a solid demand for its services and potential for future profitability.
• With a market capitalization of approximately $132 billion, Automatic Data Processing, Inc. is a significant player in the business services sector, providing stability and investor confidence.
• The firm has a high return on equity of 80.86%, demonstrating efficient use of equity capital to generate profits, which is attractive to investors looking for strong financial performance.

Automatic Data Processing Bear Case

Investors should be bearish about investing in Automatic Data Processing, Inc. for these reasons:

• The stock has a relatively high P/E ratio of 33.91, which may indicate that it is overvalued compared to its earnings, potentially leading to a price correction.
• Analysts have mixed ratings on the stock, with a consensus rating of "Hold," suggesting that there may be uncertainty about its future performance.
• Despite recent growth, the company operates in a competitive market, which could impact its ability to maintain its current growth trajectory.
• The beta of 0.76 indicates lower volatility compared to the market, which may limit potential high returns for aggressive investors.
• Institutional investors hold a significant portion of the stock, which can lead to volatility if large shareholders decide to sell their positions.

Recent News

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• Automatic Data Processing: Promising Growth Potential But Expensive (seekingalpha.com)