Claims

Prediction · Economics and markets

“These improvements would imply ~$10 of EPS by FY 2022, more than double the current earnings and a greater than 50% increase relative to the status quo potential.”

Bill Ackman, letter to PSH shareholders · 2018 · Annual Report Year Ended December 31, 2017 - Letter (Pershing Square Holdings)

If ADP's Employer Services growth rises to ~7%+ and margins to 35% or greater, ADP would earn ~$10 of EPS by FY2022, more than double current earnings.

Unresolvable The public record could not settle it.

The second judge would not resolve this claim; the verdict shown is the first judge's.

The evidence is the person's or their organisation's own records.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

This is a conditional prediction judged at the end of ADP's fiscal 2022 (30 June 2022). Check two things: (a) whether the stated conditions held, meaning Employer Services revenue growth of about 7% or more and Employer Services segment margins of 35% or more in FY2022; and (b) ADP's FY2022 adjusted diluted EPS as reported, compared with about $10 and with more than double the FY2018 base (the 'current earnings' when the claim was made). TRUE: both conditions held, and FY2022 adjusted diluted EPS was about $10 (roughly $9.50–$10.50) and more than double FY2018 EPS. MOSTLY TRUE: the conditions held and EPS was slightly short of 'about $10' (roughly $9.00–$9.49) but still more than double FY2018. MIXED: only one of the two conditions held and EPS landed in proportion, between the status-quo path and $10. MOSTLY FALSE: the conditions held (or nearly held) but EPS was well short of $10 (below about $9) or did not double. FALSE: the conditions held and EPS was far below $10, showing the improvements did not produce the predicted earnings. If neither condition was met, the antecedent did not happen and the conditional cannot be confirmed. In that case judges should record the conditions' failure and the actual EPS, and rate the claim at most MIXED (unresolvable as a conditional), not TRUE. An actual EPS near $10 reached by other means does not make it true.

Evidence

1. Document - SEC.gov U.S. Securities and Exchange Commission (filed by ADP as Exhibit 99 to Form 8-K) · 27 July 2022 Own record

   “Adj. Diluted EPS | | | $7.01 | | | 13 to 16%”

2. Document - SEC.gov U.S. Securities and Exchange Commission (filed by ADP as Exhibit 99 to Form 8-K) · 27 July 2022 Own record

   “Employer Services revenue growth as reported | | | 8 | | % | | | | 10 | | % | | | | 8 | | % | | | | 1 | | % |”

3. Document - SEC.gov U.S. Securities and Exchange Commission (filed by ADP as Exhibit 99 to Form 8-K) · 27 July 2022 Own record

   “Employer Services | | | 26.0 | | % | | | | 24.7 | | % | | | | 1.4 | | % | | | | 31.1 | | % | | | | 29.9 | | % | | | | 1.1 | | % |”

4. ADP Reports Fourth Quarter and Fiscal 2018 Results; Provides Fiscal 2019 Outlook ADP (GLOBE NEWSWIRE) · 1 August 2018 Own record

   “Adjusted diluted earnings per share increased to $4.35, representing growth of 18%”

Reasoning

The evidence shows FY2022 adjusted diluted EPS of $7.01 (E1), below ~$10 and less than double the FY2018 base of $4.35 (E4), and Employer Services margins below 35% (E3). However, it does not show which E2 column gives full-year FY2022 revenue growth, nor any status-quo EPS path, so the evidence cannot establish that exactly one condition held with EPS landing in proportion, which the criteria require for a mixed rating.

Cite this claim

Bill Ackman, “If ADP's Employer Services growth rises to ~7%+ and margins to 35% or greater, ADP would earn ~$10 of EPS by FY2022, more than double current earnings.” (said 2018). Verdict: unresolvable. Reliability API, claim c_f55ca8fa078f, method 0.1.0+c876030c. https://epistacklabs.com/claims/c_f55ca8fa078f