Here's What Analysts Are Forecasting For Automatic Data Processing, Inc. (NASDAQ:ADP) After Its Third-Quarter Results

The third-quarter results for Automatic Data Processing, Inc. (NASDAQ:ADP) were released last week, making it a good time to revisit its performance. Automatic Data Processing reported in line with analyst predictions, delivering revenues of US$5.3b and statutory earnings per share of US$2.88, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Automatic Data Processing

Taking into account the latest results, the consensus forecast from Automatic Data Processing's 17 analysts is for revenues of US$20.3b in 2025. This reflects an okay 7.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 11% to US$10.00. Before this earnings report, the analysts had been forecasting revenues of US$20.3b and earnings per share (EPS) of US$10.00 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$259, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Automatic Data Processing, with the most bullish analyst valuing it at US$282 and the most bearish at US$238 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 5.7% growth on an annualised basis. That is in line with its 6.4% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 5.6% per year. So although Automatic Data Processing is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$259, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Automatic Data Processing. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Automatic Data Processing analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.