Will ADP Stock Trend Lower?

-8.12%
Downside
258
Market
237
Trefis
ADP: Automatic Data Processing logo
ADP
Automatic Data Processing

The shares of Automatic Data Processing (NASDAQ: ADP) have declined 20% from the highs of $246 in early January largely due to a broader correction observed in the sector. The regular increase in annual guidance figures led to the monumental rise in the stock price in 2021. In the investor day presentation, ADP highlighted that its target market is growing at 5-6% annually. While the company is expected to outperform its competitors in FY2022, ADP’s revenues were growing fairly in-line with the market at 6-7% p.a. before the pandemic. After the recent decline, Trefis believes that the stock is fairly valued with a low probability of further decline. Moreover, our machine learning engine expects the stock to observe a near-term rebound as depicted in our analysis ADP Stock Chance of Rise for more details.

Five Days: ADP 4.4%, vs. S&P 500 3.6%; Outperformed market (6% event probability)

  • ADP stock gained 4.4% over a five-day trading period ending 02/03/2022, compared to the broader market (S&P500) which gained 3.6% over the same period.
  • Returns of 4.4% or higher over five-day period on 146 occasions out of 2516 (6%); Stock rose in the next five days in 89 of these 146 instances (61%).
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Ten Days: ADP -6.9%, vs. S&P 500 0%; Underperformed market (4% event probability)

  • ADP stock declined 6.9% over the last ten trading days (two weeks), compared to the broader market (S&P500) which remained fairly stable.
  • Returns of -6.9% or lower over 10-day period on 93 occasions out of 2517 (4%); Stock rose in the next 10 days in 61 of these 93 instances (66%).

Twenty-One Days: ADP -16%, vs. S&P 500 -6.5%; Underperformed market (1% event probability)

  • ADP stock declined 16% over the last twenty-one trading days (about one month), compared to the broader market (S&P500) which fell by 6.5%.
  • Returns of -16% or lower over 21-day period on 17 occasions out of 2516 (<1%); Stock rose in the next 21 days in 15 of these 17 instances (88%).

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Returns Feb 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 ADP Return -1% -17% 100%
 S&P 500 Return -1% -6% 100%
 Trefis MS Portfolio Return -2% -11% 249%

[1] Month-to-date and year-to-date as of 2/4/2022
[2] Cumulative total returns since the end of 2016

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