Automatic Data Processing Inc


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SKU: ADP Category:


Automatic Data Processing had a strong start to the year, with revenue growth of 10% and margin expansion of 140 basis points with respect to its earnings. The company’s recent quarterly result exceeded the management expectations and market expectations. Their ES new business bookings have been very strong, representing another record Q1 bookings amount due to continued strength in their HR portfolio and international business. In addition to the strong ES performance, ADP’s PEO had another strong quarter, with 15% revenue growth and 15% average worksite employee growth, exceeding its high expectations. The outperformance in the PEO was due to several factors, including a high level of hiring within the client base, strong retention, and improved bookings performance. Moreover, if ADP continues to drive outsized bookings performance for the rest of the year, their turnover and margins could surpass our estimates in the report. We maintain our ‘Hold’ rating with a revised target price.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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