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Automatic Data Processing Inc ADP Stock Quote

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Morningstar‘s Stock Analysis ADP

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Is it the right time to buy or sell?

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ADP Reaps Benefits of Rising Interest Rates and Resilient Labor Markets in Q1; $228 FVE Unchanged

Emma Williams Equity Analyst

Analyst Note

| Emma Williams |

We maintain our $228 fair value estimate for wide-moat ADP following a sound start to fiscal 2023. First-quarter top-line growth of 10% year on year was supported by continued, albeit moderating, growth in employment, higher interest on client funds, like-for-like price increases, and resilient client retention, partly offset by foreign-exchange headwinds. Increasing employment within ADP’s client base drove improved operating leverage, and greater contribution from ultra-high-margin client funds interest revenue supported operating margin expansion of 30 basis points to 24.1%, offsetting increased labor and selling expenses.

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Key Statistics ADP

Company Profile ADP

Business Description

ADP is a provider of payroll and human capital management solutions servicing the full scope of businesses from micro to global enterprises. ADP was established in 1949 and serves over 990,000 clients primarily in the United States. ADP's employer services segment offers payroll, HCM solutions, human resources outsourcing, insurance and retirement services. The smaller but faster-growing professional employer organization segment provides HR outsourcing solutions to small and midsize businesses through a co-employment model.

One ADP Boulevard
Roseland, NJ, 07068
T +1 973 974-5000
Industry Staffing & Employment Services
Most Recent Earnings Sep 30, 2022
Fiscal Year End Jun 30, 2023
Employees 60,000

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