Automatic Data Processing, Inc. (NASDAQ:ADP) Full-Year Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Investors in Automatic Data Processing, Inc. (NASDAQ:ADP) had a good week, as its shares rose 4.3% to close at US$264 following the release of its annual results. Automatic Data Processing reported in line with analyst predictions, delivering revenues of US$19b and statutory earnings per share of US$9.10, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Automatic Data Processing

Taking into account the latest results, the current consensus from Automatic Data Processing's 14 analysts is for revenues of US$20.2b in 2025. This would reflect a satisfactory 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 9.2% to US$10.04. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$20.2b and earnings per share (EPS) of US$9.97 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$272. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Automatic Data Processing at US$310 per share, while the most bearish prices it at US$250. This is a very narrow spread of estimates, implying either that Automatic Data Processing is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Automatic Data Processing's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 6.7% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.2% annually. Factoring in the forecast slowdown in growth, it looks like Automatic Data Processing is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$272, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Automatic Data Processing going out to 2027, and you can see them free on our platform here..

You can also view our analysis of Automatic Data Processing's balance sheet, and whether we think Automatic Data Processing is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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