Payroll And Human Resource Management Week In Review: ADP And Paychex

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The payroll and human resource management industry saw some positive news come their way last week with job additions continuing in the month of August. However, despite the news of favorable employment conditions in the U.S., stock prices for Automatic Data Processing (NASDAQ:ADP) and Paychex (NASDAQ:PAYX) declined through the week. Here is what happened with ADP and Paychex in the past week.

ADP reports growth in employment across all four regions in the U.S. in August

On September 8, Automatic Data Processing released its monthly Regional Employment Report for the month of August 2014, reporting a total addition of 204,000 jobs in the U.S. nonfarm private sector. [1] All four regions – Northeast, Midwest, East and South – showed an increase in private sector employment. This bodes well for payroll and human resource management companies such as ADP and Paychex since the addition of jobs has a direct impact on their revenues.

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We currently have a price estimate of $74.3 for ADP, approximately 10% lower than its current market price. We estimate revenues of $13.17 billion and EPS of $3.49 for this fiscal year.

Click here to see our complete analysis of ADP

Complete Controller partners with Paychex

Complete Controller, a provider of online accounting services, announced it will be partnering with Paychex in order to offer excellent service and pricing to businesses. [2] This partnership will result in the integration of Paychex’s platform for accountants and Complete Controller’s Quickbooks, their online accounting software. Paychex and Complete Controller operate on the same business model, wherein they both offer a single point of contact for their client to cater to the needs of their outsourced services.

We currently have a price estimate of $41 for Paychex, approximately 2% lower than its current market price. We estimate revenues of $2.7 billion and EPS of $1.87 for this fiscal year.

Click here to see our complete analysis of Paychex

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Notes:
  1. ADP Regional Employment Report August 2014, www.adpemploymentreport.com []
  2. Complete Controller is Now Partnering with Paychex to Bring Excellent Services to Businesses, September 10, 2014, www.marketwatch.com []