What's in the Offing for Automatic Data's (ADP) Q2 Earnings?
Automatic Data Processing, Inc. ADP is scheduled to release its second-quarter fiscal 2024 results on Jan 31, before market open.
ADP has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 2.6%.
Q2’24 Expectations
The Zacks Consensus Estimate for the top line is currently pegged at $4.66 billion, up 7% from the year-ago actual figure.
Automatic Data Processing, Inc. Price and EPS Surprise
Automatic Data Processing, Inc. price-eps-surprise | Automatic Data Processing, Inc. Quote
The consensus estimate for earnings per share is pegged at $2.1, indicating an increase of 7.1% year over year. A strong revenue performance is likely to have driven such an increase in the bottom line.
Segmental Expectations
Our estimate for second-quarter fiscal 2024 revenues from Employer Service is currently pegged at $3.1 billion, up 7.2% from the year-ago reported figure. The company has been seeing an uptick in bookings, and we expect such momentum to continue and contribute to Employer Service revenue growth.
Our estimate for PEO services revenues is currently pegged at $1.56 billion, 4% higher than the year-ago reported figure. The growth can be due to the expected increase in bookings. Our estimate for Interest on Funds held for clients is currently pegged at $222 million, indicating a 4.8% increase from the year-ago reported figure.
Our estimate for Average Paid PEO Worksite Employees during the fiscal second quarter is pegged at 731. Changes in Pay per control are expected to be 2.5% in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for ADP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they're reported with our Earnings ESP Filter.
ADP has an Earnings ESP of +0.21% and a Zacks Rank of 4 (Sell).
Stocks to Consider
Here are a few stocks from the broader Business Services sector, which, according to our model, have the right combination of elements to beat on earnings this season.
Gartner IT: The Zacks Consensus Estimate for the company’s fourth-quarter revenues is pegged at $1.59 billion, indicating growth of 5.4%. For earnings, the consensus mark stands at $2.78, 24.6% lower than the year-ago quarter. The company beat the Zacks Consensus Estimate in all the past four quarters, with an average surprise of 34.4%.
IT currently has an Earnings ESP of +0.81% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
Fiserv FI: The Zacks Consensus Estimate for the company’s fourth-quarter revenues is pegged at $4.69 billion, indicating growth of 7.5%. For earnings, the consensus mark is pegged at $2.15, 12.6% higher than the year-ago quarter. The company beat the Zacks Consensus Estimate in two of the past four quarters and matched on the other two instances. It has an average surprise of 0.58%.
FI currently carries an Earnings ESP of +0.05% and a Zacks Rank #2.
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Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
Gartner, Inc. (IT) : Free Stock Analysis Report
Fiserv, Inc. (FI) : Free Stock Analysis Report
