Automatic Data Processing, Inc. (NASDAQ:ADP) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results were roughly in line with estimates, with revenues of US$5.0b and statutory earnings per share of US$2.35. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Automatic Data Processing

After the latest results, the 15 analysts covering Automatic Data Processing are now predicting revenues of US$20.4b in 2025. If met, this would reflect a reasonable 2.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 2.8% to US$9.94. In the lead-up to this report, the analysts had been modelling revenues of US$20.4b and earnings per share (EPS) of US$9.95 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$308. 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. The most optimistic Automatic Data Processing analyst has a price target of US$350 per share, while the most pessimistic values it at US$281. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Automatic Data Processing's revenue growth is expected to slow, with the forecast 5.4% annualised growth rate until the end of 2025 being well below the historical 7.2% p.a. growth over the last 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. So it's pretty clear that, while Automatic Data Processing's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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$308, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Automatic Data Processing analysts - going out to 2027, and you can see them free on our platform here.

You can also see whether Automatic Data Processing is carrying too much debt, and whether its balance sheet is healthy, 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.