Automatic Data Processing (NASDAQ:ADP) Hits New 52-Week High - Still a Buy?

Key Points

• ADP shares reached a new 52-week high of $289.80, significantly above the previous close of $280.32. Despite the rally, Wall Street’s average rating remains “Hold,” with an average price target of $273.50.
• The company exceeded quarterly expectations, reporting $2.64 in EPS and $5.47 billion in revenue, while revenue grew 6.8% year over year. Analysts expect approximately $12.27 in EPS for the current year.
• ADP pays a quarterly dividend of $1.70 per share, equivalent to a 2.4% annual yield. Institutional investors own about 80% of the stock, while insiders sold roughly $9.45 million worth of shares over the past 90 days.

Automatic Data Processing, Inc. (NASDAQ:ADP - Get Free Report)'s stock price hit a new 52-week high during trading on Thursday. The company traded as high as $289.80 and last traded at $289.1210, with a volume of 181,156 shares trading hands. The stock had previously closed at $280.32.

Wall Street Analysts Forecast Growth

ADP has been the subject of several recent research reports. Stifel Nicolaus raised their price target on Automatic Data Processing from $260.00 to $285.00 and gave the stock a "hold" rating in a research report on Thursday, July 30th. TD Cowen upped their price objective on Automatic Data Processing from $216.00 to $223.00 and gave the company a "hold" rating in a research report on Monday, July 6th. Morgan Stanley increased their price objective on Automatic Data Processing from $240.00 to $286.00 and gave the company an "equal weight" rating in a research note on Thursday, July 30th. Weiss Ratings raised Automatic Data Processing from a "hold (c)" rating to a "hold (c+)" rating in a research note on Tuesday, September 22nd. Finally, Citigroup lifted their price objective on Automatic Data Processing from $230.00 to $287.00 and gave the stock a "neutral" rating in a research report on Thursday, July 30th. Three research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the company has an average rating of "Hold" and an average target price of $273.50.

Automatic Data Processing Stock Performance

The firm has a market cap of $114.03 billion, a PE ratio of 26.27, a P/E/G ratio of 2.50 and a beta of 0.83. The company has a debt-to-equity ratio of 0.82, a current ratio of 1.05 and a quick ratio of 1.05. The stock has a 50-day moving average price of $272.40 and a 200 day moving average price of $241.28.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The business services provider reported $2.64 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.59 by $0.05. The firm had revenue of $5.47 billion for the quarter, compared to analyst estimates of $5.44 billion. Automatic Data Processing had a return on equity of 71.34% and a net margin of 20.11%. The firm's quarterly revenue was up 6.8% on a year-over-year basis. During the same period last year, the company earned $2.26 EPS. Automatic Data Processing has set its FY 2027 guidance at 12.120-12.340 EPS. Research analysts forecast that Automatic Data Processing, Inc. will post 12.27 earnings per share for the current year.

Automatic Data Processing Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Investors of record on Friday, September 11th were given a dividend of $1.70 per share. The ex-dividend date of this dividend was Friday, September 11th. This represents a $6.80 annualized dividend and a yield of 2.4%. Automatic Data Processing's dividend payout ratio is 62.16%.

Insider Activity at Automatic Data Processing

In other Automatic Data Processing news, VP David Kwon sold 2,414 shares of the stock in a transaction that occurred on Thursday, July 30th. The shares were sold at an average price of $265.62, for a total transaction of $641,206.68. Following the transaction, the vice president owned 9,660 shares of the company's stock, valued at $2,565,889.20. This trade represents a 19.99% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Brian Michaud sold 120 shares of Automatic Data Processing stock in a transaction on Friday, August 21st. The shares were sold at an average price of $279.70, for a total transaction of $33,564.00. Following the completion of the transaction, the vice president owned 18,442 shares in the company, valued at approximately $5,158,227.40. This trade represents a 0.65% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 33,773 shares of company stock worth $9,450,629. Company insiders own 0.15% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in ADP. BlackRock Inc. bought a new stake in Automatic Data Processing during the second quarter worth about $8,097,229,000. Bank of America Corp DE purchased a new stake in Automatic Data Processing in the second quarter worth about $1,231,175,000. Deutsche Bank AG bought a new position in shares of Automatic Data Processing during the second quarter valued at approximately $994,937,000. Bank of New York Mellon Corp bought a new position in shares of Automatic Data Processing during the second quarter valued at approximately $725,513,000. Finally, Legal & General Group Plc bought a new position in shares of Automatic Data Processing during the second quarter valued at approximately $562,425,000. Institutional investors and hedge funds own 80.03% of the company's stock.

Automatic Data Processing Company Profile

Automatic Data Processing, Inc NASDAQ: ADP is a provider of human capital management and business outsourcing solutions. The company helps organizations manage payroll, tax withholding and compliance, employee benefits, time and attendance, workforce management, talent acquisition, and human resources administration.

ADP offers cloud-based platforms and related services designed for businesses of different sizes, from small companies to large multinational employers. Its offerings include payroll and HR software, workforce analytics, talent management tools, retirement and insurance-related administration, and professional employer organization services through ADP TotalSource.

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