Automatic Data Processing Inc. [NASDAQ:ADP] shares were trading 2.21% to $146.91 on Wednesday. Comparativley, The S&P 500 is trading at 0.55%. For the year, the stock is trading -15.70% and the five-day change stands at 3.04%.
ADP’s next earning date is 10/28/2020. Currently, the company is booking earnings per share of 5.68 with the price-to-cash-flow at 44.36.
The company is also reporting 5.68 earnings per share.
Wait and see
Holding a Market Cap of $61.35 billion, Automatic Data Processing Inc. has seen a trading range over the last year of $103.11-$182.32.
For the last five days, ADP is up from its last closing price. The average shares trading hands each day is 2.15M, with average 10-day volume coming in at 2.28 million.
Using a Force Index Indicator is a good way to look at how strong actual buying and selling pressure is for ADP. When we apply the Elder Force Index to Automatic Data Processing Inc., we are seeing an Elder Force Indicator number of 2397271.62.
Recent Performance
The recent performance of the stock is another area that can tell traders how to proceed. ADP is presenting an interesting case. This can be seen in the Forward P/E ratio, which currently stands at 24.16. Moreover, the company’s enterprise value has gone from $64.67B to $59.60B quarter-over-quarter. Obviously, the company is heading in the wrong direction, but there are still opportunities for growth in the sector.
In the last quarter, ADP made a profit of 1.31 billion. Automatic Data Processing Inc. also saw quarter revenue growth year over year of 2.92%. In addition, the company has operating cash flow of $3.03 billion.
Technical Analysis
Looking at popular technical indicators, the company’s 5-day moving average is 142.43 compared to the 50-day moving average of 137.60. So, we are clearly seeing an upward trajectory here.
The Relative Strength Index or RSI is an indicator ranging between 0 and 100 that traders use to determine if a stock is “overbought” or “oversold.” A strong uptrend tending to reach into the “overbought” status is above 70, while a downward trend will stay around the 30 mark. ADP currently holds a 9-day RSI of 73.37%, while 100-day RSI stands at 50.10%.
Another indicator we believe is worth keeping tabs on is the Moving Average Convergence Divergence or MACD. Similar to the concept of the Force Index — on the basis of price momentum — the MACD gives traders a tool to measure the turning point of a stock even during rapid fluctuations in price. Buy and sell signals are determined by a stock’s relation to the zero line, so if a stock is above a zero line for many weeks it might be a “buy.” On the other hand, if a stock is below the zero line consistently, it might be one to stay away from. Also, if the MACD line reaches a peak and dips, its momentum may be waning. ADP’s 9-day MACD is 3.70 and the company’s 100-day MACD stands at 1.83.
Inside Moves
Another area that is important to analyze is insider moves and majority shareholders. While this is not always an error-free way to tell what the future holds for a stock, you can maybe gather important information from reading the tea leaves about who is buying and selling.
The major holders for this stock are 0.14% by insiders and 82.28% by institutions. Regarding institutional holdings, Vanguard Group, Inc. (The) owns 8.97%, while the second top holder, Blackrock Inc., currently owns 7.48%.
Over the last six months, insiders have sold 11,634 with the most recent transaction from Rodriguez Carlos A, President & CEO, with a sell at price 135.88 per share.
Conclusion
Overall, the recommended rating for ADP is Moderate Buy. Currently, the company has 17 analysts watching the stock, and the average quarterly earnings estimate is 0.98. Quarterly revenue estimates are averaging 3.28B with the high estimate reaching 3.34B and the low at 3.21B.
To review, the current 1-year target estimate is sitting at 149.29, while the current price 146.91. Based on this, we expect the stock to rise considering the aforementioned fundamentals.
