Stock of the Day

December 11, 2024

Automatic Data Processing (ADP)

$304.67
-$2.65 (-0.9%)
Market Cap: $124.14B

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 stock is currently priced at $298.15, reflecting a 0.7% increase recently, indicating positive market sentiment.
  • Automatic Data Processing, Inc. reported earnings of $2.33 per share, surpassing the consensus estimate of $2.21, showcasing strong financial performance.
  • The company achieved a revenue of $4.83 billion for the latest quarter, exceeding analyst expectations and demonstrating robust growth.
  • With a return on equity of 82.36%, Automatic Data Processing, Inc. shows effective management and profitability, which can attract investors looking for strong returns.
  • The firm has a solid market capitalization of approximately $121.48 billion, indicating stability and a strong position in the market.

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 price-to-earnings (P/E) ratio of 31.82, which may suggest that it is overvalued compared to its earnings.
  • Despite recent growth, the company's beta of 0.79 indicates lower volatility, which may not appeal to investors seeking high-risk, high-reward opportunities.
  • The debt-to-equity ratio stands at 0.56, which, while manageable, suggests that the company is using some leverage that could pose risks in economic downturns.
  • Automatic Data Processing, Inc. has a payout ratio of 65.74%, indicating that a significant portion of earnings is distributed as dividends, potentially limiting reinvestment in growth opportunities.
  • Recent increases in institutional ownership, while generally positive, can lead to volatility if large investors decide to sell their positions quickly.

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