ADP stock: buy or sell?
Updated on:
May 20th, 2019
4
Automatic Data Processing, Inc. provides business process outsourcing services worldwide. The company operates through two segments, Employer Services and Professional Employer Organization (PEO) Services.
Should I buy ADP stock?
Trading stocks requires experience and discipline, and your buying and selling decisions must come following a methodology. That's why is so important to define your own trading plan that matches with your character as inversor. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best.Currently, Automatic Data Processing stock doesn't match any of these trading strategies, so our recommendation is not to buy.
| Buy setup | Elegible |
|---|---|
| New all-time high | No |
| New 52 week high | No |
| Price crossing up 200d MA | No |
| 100d MA crossing up 200d MA | No |
Is Automatic Data Processing stock a buy?
Everyday, hundreds of stock ratings are published by financial analysts to indicate a particular stock's attractiveness.
At Stocks2.com, we collected 2 ratings published for ADP stock in the last 30 days.| Date | Analyst / Broker | Previous rating | Current rating |
| 2019-5-6 | Barclays | Overweight | Overweight |
| 2019-5-2 | Citigroup | Neutral | Neutral |
ADP stock analysis
Daily outlook
After climbing for 4 days, Monday Automatic Data Processing remained stable an ugly -0.23%, closing at $161.34.
After climbing for 4 days, Monday Automatic Data Processing remained stable an ugly -0.23%, closing at $161.34. Since January when ADP stock price broke up the SMA200d line, it gained $28.03 (21.03%). From a daily perspective, ADP is in a short term uptrend after plotting its last bottom ($157.00, on May 13th) higher than the previous bottom, and its last top ($162.45, on Thursday) also over the previous top. Now trading in between its last bottom and last top ADP might consolidate in a plain range, waiting to break out over $162.45 or down under $157.00. On March, SMA50d and SMA100d crossed up triggering a rise of 6.33%. On Apr/24, ADP hit a new all time high, pushing higher than on Apr/23 tops. Check different trading setups that use ATHs as triggers.
Weekly outlook
Shares of Automatic Data Processing closed this week at $161.34 and stayed stable a tight -0.23%.
Observing the weekly chart, ADP marked an uptrend of rising tops and rising bottoms. Since its last top late April at $165.50, price slid and bounced up back from $154.71. Breaking down under $154.71 would cancel the current uptrend and it might test lower supports. Note that $165.50 might act as a resistance line. Not so far away is the last all-time high Automatic Data Processing marked late April. Since late January when ADP stock price broke up the SMA40w line, it gained $25.64 (18.89%). Since SMA10d and SMA20w crossed up late February, ADP price climbed $8.95 per share (5.87%).
ADP stock price history
ADP stock went public on March 17th, 1980 with a price of $0.171. Since then, ADP stock grew a 94,805.90%, with a yearly average of 2,430.90%. If you had invested right after ADP's IPO a $1,000 in ADP stock in 1980, it would worth $948,059.00 today.
1: Adjusted price after possible price splits or reverse-splits.
ADP stock historical price chart
ADP stock reached all-time highs on April 24th with a price of $165.50.
ADP stock price target is $171.00
Nobody can reliably foresee how stock prices may evolve in the future. However, many stock price predictions are published every day by banks, financial institutions and independent analysts. We do not recommend to follow these stock price predictions without a critical thinking from your side, as their accuracy is usually low. For the last month we found 2 price targets for Automatic Data Processing stock:| Date | Analyst / Broker | Action | Previous target | Current target | Diff |
| 2019-5-6 | Barclays | Raises Target | $168.00 | $180.00 | 7.1% |
| 2019-5-2 | Citigroup | Raises Target | $147.00 | $162.00 | 10.2% |
| (in average) | $157.50 | $171.00 | 9.0% |
Financials and fundamental analysis
Earnings date and Earnings per Share
Since Apr/30, when Automatic Data Processing published its last earnings report, it stayed steady a lame -1.01%. As soon as we get its posted EPS from the earnings report, we will extend this report.| Quarter | Reporting date | Estimated EPS | Actual EPS | Surprise |
|---|---|---|---|---|
| 2017-Q2 | - | n/a | 0.59 | n/a |
| 2017-Q3 | 2017-11-02 | 0.85 | 0.91 | 7.1% |
| 2017-Q4 | 2018-01-31 | 0.9 | 0.99 | 10.0% |
| 2018-Q1 | 2018-05-02 | 1.44 | 1.52 | 5.6% |
| 2018-Q2 | 2018-08-01 | 0.9 | 0.92 | 2.2% |
| 2018-Q3 | 2018-10-31 | 1.1 | 1.2 | 9.1% |
| 2018-Q4 | 2019-01-30 | 1.18 | 1.34 | 13.6% |
| 2019-Q1 | 2019-04-30 | 1.69 | n/a | n/a |
| 2019-Q2 | - | n/a | n/a | n/a |
| 2019-Q3 | - | n/a | n/a | n/a |
Annual financial results
Compared to 2017, last anual turnover report draw a great increase of 7.64% to $13,325.80 million dollars. When comparing 2018 vs 2017, by contrast, profit margin (that is, the net income divided by revenues) depreciated a -1.84% to 12.16%. To have an up to date picture of the financial situation of Automatic Data Processing, we have calculated the trailing twelve month (TTM) sales and income figures. TTM values are the sum of the last 4 quarters and aproximate to an annual fiscal report ending in 2019-Q1 that can be compared to 2018 fiscal year results. Annual Automatic Data Processing TTM sales up to March 2019 were $13,995.10 and earnings were $1,926.00 million dollars. When comparing this TTM figures with the last reported annuality, we can review Automatic Data Processing business evolution since June 2018: Annual revenues up to March, compared to lastest yearly report, jumped a beatiful 5.02%. Similarly, profit margin (net income/sales) stepped up at 12.16%.| Year | Sales | YoY | Income/(margin) | YoY |
|---|---|---|---|---|
| 2013 | $11,310 M | - | $1,360 M12.0% | - |
| 2014 | $12,210 M | 7.96% | $1,500 M12.3% | 10.29% |
| 2015 | $10,939 M | -10.41% | $1,453 M13.3% | -3.17% |
| 2016 | $11,668 M | 6.67% | $1,493 M12.8% | 2.75% |
| 2017 | $12,380 M | 6.10% | $1,733 M14.0% | 16.14% |
| 2018 | $13,326 M | 7.64% | $1,621 M12.2% | -6.50% |
| TTM | $13,995 M | 5.02% | $1,926 M13.8% | 18.83% |
Quarterly financial results
Automatic Data Processing posted $3,847.40 M in sales for 2019-Q1, a 9.74% up compared to previous quarter. Reported quarter income marked $753.70 M with a profit margin of 19.59%. Profit margin gained a 3.67% compared to previous quarter when profit margin was 15.92%. When comparing revenues to same quarter last year, Automatic Data Processing sales marked a nice gain and inched a 4.18%. Looking back to recent quarterly results, Automatic Data Processing posted 3 positive quarters in a row.| Quarter | Sales1 | QoQ2 | Income1/(margin) | QoQ2 |
|---|---|---|---|---|
| 2017-Q2 | $3,060 M | - | $266 M8.7% | - |
| 2017-Q3 | $3,079 M | 0.61% | $402 M13.0% | 51.05% |
| 2017-Q4 | $3,235 M | 5.09% | $468 M14.4% | 16.44% |
| 2018-Q1 | $3,693 M | 14.14% | $643 M17.4% | 37.56% |
| 2018-Q2 | $3,319 M | -10.14% | $109 M3.3% | -83.10% |
| 2018-Q3 | $3,323 M | 0.14% | $505 M15.2% | 364.95% |
| 2018-Q4 | $3,506 M | 5.50% | $558 M15.9% | 10.45% |
| 2019-Q1 | $3,847 M | 9.74% | $754 M19.6% | 35.02% |
Automatic Data Processing ownership
When you are planning to invest in a company, it's worth to review its ownership structure.Management staff in all public traded companies that hold equity is required to report every transaction to the SEC. For Automatic Data Processing, 0.17% of all outstanding shares are owned by its staff.
Bearish positions for ADP stock account 0.00%, no big difference from last month.
For a better understanding, the following table shows ownership data compared to other related companies:
| ADP | ACN | ADS | BBSI | EFX | |
|---|---|---|---|---|---|
| Market cap | $70.2 B | $113.7 B | $7.6 B | $569.8 M | $14.6 B |
| Total shares | 435.2 M | 637.8 M | 52.4 M | 7.4 M | 120.8 M |
| Float shares | 434.6 M | 636.6 M | 47.2 M | 6.7 M | 120.1 M |
| - Institutional holdings (%) | 81.8% | 72.5% | 97.2% | 81.4% | 88.7% |
| - Insider holdings (%) | 0.2% | 0.2% | 2.8% | 4.2% | 0.4% |
| Shares in short selling | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
ADP summary
| Monday, May 20th, 2019 | |
|---|---|
| Open | $160.10 |
| Close | $161.34 |
| Day range | $160.10 - $162.71 |
| Previous close | $161.72 |
| Session gain | -0.23% |
| Average true range | $3.51 |
| 50d mov avg | $159.27 |
| 100d mov avg | $149.85 |
| 200d mov avg | $145.54 |
| Daily pattern | lt06a |
| Weekly pattern | lb03a |
Automatic Data Processing performance
To measure stock performance is always good to compare with competitors or related stocks. In the following table, we compare Automatic Data Processing to Accenture, Alliance Data Systems, Barrett Business Services, Equifax, Fidelity National Financial, Intuit, Insperity, Paychex, TriNet and WageWorks:| Stock | 3m | 6m | 12m |
|---|---|---|---|
| ADPAutomatic Data Pr... | 5.87% | 15.76% | 26.07% |
| ACNAccenture | 12.92% | 8.98% | 16.83% |
| ADSAlliance Data Sys... | -15.25% | -25.87% | -29.76% |
| BBSIBarrett Business ... | 9.33% | 9.44% | -10.26% |
| EFXEquifax | 9.87% | 20.41% | 6.34% |
| FNFFidelity National... | 14.07% | 22.77% | 5.90% |
| INTUIntuit | -2.71% | 24.18% | 24.66% |
| NSPInsperity | -12.29% | 12.94% | 26.56% |
| PAYXPaychex | 14.38% | 30.07% | 35.03% |
| TNETTriNet | 0.21% | 36.51% | 13.97% |
| WAGEWageWorks | 34.03% | 37.04% | 11.28% |
Automatic Data Processing competitors
One check before investing in any stock is to review a list of its competitors, in this case for Automatic Data Processing. We picked 10 companies as Automatic Data Processing competitors as they are in the same industry or have similar market objectives.- Accenture (ACN)
- Alliance Data Systems (ADS)
- Barrett Business Services (BBSI)
- Equifax (EFX)
- Fidelity National Financial (FNF)
- Intuit (INTU)
- Insperity (NSP)
- Paychex (PAYX)
- TriNet (TNET)
- WageWorks (WAGE)
Latest ADP stock news
- Seeking AlphaAutomatic Data Processing Gets A Catalyst From Revised OutlookFebruary 4, 2019
- Seeking AlphaAutomatic Data Processing: Shares Ready To RallyJanuary 31, 2019