Payroll Processors Weekly Review: ADP, Paychex

February 27th, 2015 by Trefis Team
+2.07%
Upside
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Market
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ADP: Automatic Data Processing logo
ADP
Automatic Data Processing

This week in the Human Capital Management industry, Paychex (NASDAQ:PAYX) released its Small Business Scorecard providing insights regarding change in trends in small business hiring. Meanwhile, Automatic Data Processing (NASDAQ:ADP) opened a “center of excellence” to provide enhanced services to clients.

Automatic Data Processing

On February 24, ADP announced that it had opened a “center of excellence” in Bucharest, Romania. The center will serve as a global delivery center providing support and services to clients across the globe. [1] It also helps ADP expand its geographic presence. ADP has two other “centers of excellence”, one in Prague, Czech Republic, and the other in Barcelona, Spain, which was opened last year.

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ADP’s stock was relatively stagnant through Thursday. We currently have a price estimate of $76 for ADP. We estimate revenues of $11 billion and EPS of $2.96 for fiscal 2015, in line with consensus estimates.

Click here to see our complete analysis of ADP

Paychex

Surepayroll, Paychex’s online payroll services arm, released its Small Business Scorecard, which pointed towards a change in factors that are currently driving hiring in small and micro businesses (1-10 employees). A year ago, businesses rated salary and benefits as the major hurdle to hiring. [2] However, these factors have taken a backseat, with businesses now focusing on finding the right candidate. Also, there has been a significant increase in the use of LinkedIn for recruiting.

Paychex’s stock rose slightly over the week through Thursday. We currently have a price estimate of $45 for Paychex. We estimate revenues of $2.7 billion and EPS of $1.83 for fiscal 2015, in line with consensus estimates.

Click here to see our complete analysis of Paychex

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Notes:
  1. ADP Opens Global ‘Center of Excellence’ in Bucharest to Enhance Delivery of Human Capital Management Services to Global Clients, February 24, 2015, www.marketwatch.com [↩]
  2. Small Businesses Get Aggressive on Hiring, February 23, 2015, www.surepayroll.com [↩]