What Awaits for Automatic Data Processing (ADP) in Q2 Earnings?
Automatic Data Processing, Inc. ADP is scheduled to report second-quarter fiscal 2023 results on Jan 25, before market open.
Let’s check out how things have shaped up so far for this announcement.
Expectations This Time Around
The Zacks Consensus Estimate for revenues for the fiscal second quarter is pegged at $4.38 billion, indicating 8.7% growth from the year-ago fiscal quarter’s reported figure.
The consensus mark for Employer Services revenues is pegged at $2.87 billion, implying growth of 7.5% from the year-ago fiscal quarter’s reported figure. The uptick is likely to have been aided by growth in new business bookings, strong retention, higher sales and pays per control trends.
Automatic Data Processing, Inc. Price and EPS Surprise
Automatic Data Processing, Inc. price-eps-surprise | Automatic Data Processing, Inc. Quote
The consensus estimate for PEO Services revenues is pegged at $1.52 billion, indicating growth of 11.8% from the year-earlier fiscal quarter’s reported number. The upside is likely to have been aided by an increase in average worksite employees paid by PEO Services.
The consensus mark for Interest on funds held for clients’ revenues is pegged at $195 million, indicating growth of 84% from the prior-year fiscal period’s reported figure. Strength across Automatic Data Processing’s average client funds balances might have aided its segmental growth.
The Zacks Consensus Estimate for earnings is pegged at $1.94 per share, implying growth of 17.6% from the year-ago fiscal quarter’s reported figure.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Automatic Data Processing 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, which isn’t the case here as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Automatic Data Processing has an Earnings ESP of +0.29% and a Zacks Rank #4(Sell).
Stocks to Consider
Here are a few stocks from the broader Zacks Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this season:
Trane Technologies plc TT has an Earnings ESP of +0.15% and a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here.
Trane Technologies has an expected earnings growth rate of 9% for the current year 2023. TT has a trailing four-quarter earnings surprise of 3.4%, on average.
Riot Blockchain RIOT has an Earnings ESP of +16.67% and is Zacks #3 Ranked.
Riot has an expected revenue growth rate of 49% for the current year 2023.
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Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
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