ADP has been on a dream run off-late with its stock price zooming to new highs after a wonderful fourth quarter, with growth accelerating on a sequential basis to provide its highest quarter ever for new business bookings. The management produced a 15% increase in ES bookings for the year. The company’s portfolio of HCM services has persisted in the market despite a number of global uncertainties, such as the pandemic’s continuing effects, the situation in Ukraine, inflation, and worries about a global recession. The company has also seen the effectiveness of their retirement services division, a crucial part of their HCM product line. Furthermore, ADP provides recordkeeping services, unbiased independent advisory services, and access to more than 10,000 investment options from more than 300 investment managers through ADP Mobile App and its core platform for its clients, employees, and financial advisers. Given the current high valuation, the management anticipation to increase their average sales headcount by a mid-single-digit percentage throughout fiscal 2023 makes us neutral on Automatic Data Processing’s stock. We give it a ‘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
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