Automatic Data Processing (NASDAQ:ADP) Reaches New 1-Year High - Here's What Happened

Key Points

• ADP hit a new 52-week high, reaching $310.98 on Thursday, up from its prior close of $303.54.
• Recent business data was positive: ADP beat quarterly earnings and revenue estimates, with revenue up 6.1% year over year, while its October report showed private employers added 86,000 jobs—above forecasts.
• Analysts’ consensus rating remains Hold, with an average price target of $285; valuation concerns include an assessment that shares may be about 13% above fair value.

Automatic Data Processing, Inc. (NASDAQ:ADP - Get Free Report)'s stock price hit a new 52-week high on Thursday. The company traded as high as $310.98 and last traded at $306.0270, with a volume of 767,341 shares changing hands. The stock had previously closed at $303.54.

Automatic Data Processing News Roundup

Here are the key news stories impacting Automatic Data Processing this week:

• Positive Sentiment: ADP’s October National Employment Report showed private employers added 86,000 jobs, above the 69,000 forecast. Broad-based hiring and rising pay point to continued employer activity, which may support demand for ADP’s payroll and HR services. October ADP jobs report
• Positive Sentiment: The company’s latest reported quarter also showed momentum: ADP beat analyst estimates for earnings and revenue, with revenue up 6.1% year over year. ADP fair-value and results article
• Neutral Sentiment: ADP’s announcement of finalists for its 2027 HCM Distinction Awards highlights its human-capital-management business but does not indicate a material financial change. HCM Distinction Award finalists
• Negative Sentiment: A valuation article points to a 13% fair-value gap, raising the possibility that shares are priced above estimated value. A separate cash-flow-focused article also examines whether the stock’s valuation is justified, adding a potential constraint on further gains. Fair-value analysis Cash-flow valuation analysis
• Negative Sentiment: ADP VP Michael Bonarti sold 7,487 shares for about $2.25 million. The sale was made under a pre-arranged Rule 10b5-1 plan and he retained 81,849 shares, which may lessen—but does not eliminate—the negative sentiment from insider selling. Insider sale report

Wall Street Analyst Weigh In

ADP has been the topic of a number of recent research reports. Morgan Stanley raised their target price on shares of Automatic Data Processing from $286.00 to $288.00 and gave the stock an "equal weight" rating in a report on Thursday, October 29th. Citigroup upped their target price on Automatic Data Processing from $287.00 to $295.00 and gave the company a "neutral" rating in a report on Thursday, October 29th. Jefferies Financial Group increased their price target on Automatic Data Processing from $225.00 to $250.00 and gave the stock an "underperform" rating in a research report on Wednesday, October 28th. Royal Bank Of Canada reissued a "sector perform" rating and issued a $290.00 price target on shares of Automatic Data Processing in a report on Thursday, October 29th. Finally, Stifel Nicolaus boosted their price objective on Automatic Data Processing from $285.00 to $305.00 and gave the company a "hold" rating in a research report on Thursday, October 29th. Three research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat, the company presently has an average rating of "Hold" and an average price target of $285.00.

Automatic Data Processing Stock Performance

The company has a debt-to-equity ratio of 0.98, a quick ratio of 1.05 and a current ratio of 1.03. The stock's fifty day moving average is $278.29 and its two-hundred day moving average is $241.44. The firm has a market cap of $120.96 billion, a price-to-earnings ratio of 27.13, a PEG ratio of 2.66 and a beta of 0.77.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) last posted its earnings results on Wednesday, October 28th. The business services provider reported $2.82 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.77 by $0.05. Automatic Data Processing had a net margin of 20.33% and a return on equity of 77.01%. The firm had revenue of $5.49 billion during the quarter, compared to analyst estimates of $5.48 billion. During the same period in the previous year, the business posted $2.49 EPS. Automatic Data Processing's revenue was up 6.1% on a year-over-year basis. On average, analysts expect that Automatic Data Processing, Inc. will post 12.38 earnings per share for the current fiscal year.

Insider Activity at Automatic Data Processing

In related news, VP Joseph Desilva sold 631 shares of Automatic Data Processing stock in a transaction dated Thursday, September 3rd. The shares were sold at an average price of $282.87, for a total transaction of $178,490.97. Following the sale, the vice president directly owned 18,824 shares in the company, valued at $5,324,744.88. The trade was a 3.24% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Michael Bonarti sold 7,487 shares of the company's stock in a transaction that occurred on Monday, November 2nd. The stock was sold at an average price of $300.00, for a total transaction of $2,246,100.00. Following the completion of the sale, the vice president directly owned 81,849 shares of the company's stock, valued at approximately $24,554,700. This represents a 8.38% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 41,773 shares of company stock valued at $11,915,182. 0.15% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

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

About Automatic Data Processing

Automatic Data Processing, Inc NASDAQ: ADP is a global provider of human capital management and business outsourcing solutions. The company helps employers manage payroll, human resources, workforce administration, benefits, tax compliance, time and attendance, talent management, and related employment processes.

ADP offers cloud-based platforms and services designed for businesses of various sizes, from small enterprises to large organizations. Its portfolio includes payroll processing, human resources management, employee benefits administration, retirement services, workforce management, data analytics, and professional employer organization services through ADP TotalSource.

Founded in 1949, ADP serves businesses in the United States and international markets.

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