Wall Street analysts expect Automatic Data Processing (ADP) to post quarterly earnings of $2.44 per share in its upcoming report, which indicates a year-over-year increase of 4.7%. Revenues are expected to be $5.13 billion, up 6.1% from the year-ago quarter.
The current level reflects a downward revision of 0.1% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period.
Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies consistently reveal a strong link between trends in earnings estimate revisions and the short-term price performance of a stock.
While investors typically use consensus earnings and revenue estimates as a yardstick to evaluate the company's quarterly performance, scrutinizing analysts' projections for some of the company's key metrics can offer a more comprehensive perspective.
In light of this perspective, let's dive into the average estimates of certain ADP metrics that are commonly tracked and forecasted by Wall Street analysts.
The consensus estimate for 'Segment revenues- Employer Services' stands at $3.45 billion. The estimate indicates a year-over-year change of +5.7%.
The collective assessment of analysts points to an estimated 'Revenues- Interest on funds held for clients' of $281.99 million. The estimate indicates a year-over-year change of +11.3%.
Analysts predict that the 'Revenues- PEO revenues' will reach $1.67 billion. The estimate indicates a year-over-year change of +6.3%.
Analysts forecast 'Segment revenues- PEO Services' to reach $1.68 billion. The estimate indicates a year-over-year change of +6.7%.
Based on the collective assessment of analysts, 'Revenues- Revenues, other than interest on funds held for clients and PEO revenues' should arrive at $3.17 billion. The estimate indicates a year-over-year change of +5.3%.
Analysts' assessment points toward 'Average paid PEO worksite employees during the period' reaching 757 . The estimate is in contrast to the year-ago figure of 737 .
View all Key Company Metrics for ADP here>>>
ADP shares have witnessed a change of -2.5% in the past month, in contrast to the Zacks S&P 500 composite's +1.3% move. With a Zacks Rank #4 (Sell), ADP is expected underperform the overall market performance in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
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Automatic Data Processing, Inc. (ADP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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