Broadridge Financial Solutions (BR) AI Stock Analysis

• Market Cap: $28.64B
• Dividend Yield: 1.43%
• Average Volume (3M): 592.36K
• Price to Earnings (P/E): 38.3
• Beta (1Y): 0.75
• Revenue Growth: 5.73%
• EPS Growth: 11.41%
• Country: US
• Employees: 14,600
• Sector: Technology
• Sector Strength: 39
• Industry: Information Technology Services
• EPS (TTM): 6.39
• Shares Outstanding: 117,018,684
• 10 Day Avg. Volume: 566,716
• 30 Day Avg. Volume: 592,363
• PEG Ratio: 3.36
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.08
• Price to Cash Flow (P/CF): 28.80
• P/FCF Ratio: 28.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $244.33
• Price Target Upside: 1.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Broadridge Financial Solutions earns a solid overall score due to its strong financial performance, positive earnings outlook, and strategic corporate events. While the company demonstrates robust cash flow and revenue growth, high valuation metrics and potential technical overbought indicators present cautionary elements. The overall positive sentiment from earnings and strategic corporate appointments adds confidence in its growth trajectory.

Positive Factors

Client Benefits

Broadridge clients are benefitting from elevated trading volumes and optimism surrounding a recovery in capital markets and M&A volumes.

Financial Performance

Equity position growth accelerated to +11% y/y in the quarter, indicating strong performance.

Revenue Growth

Broadridge is well positioned to deliver consistent recurring revenue growth in the mid- to high-single digits in the medium term, driven by favorable demographics and growing complexities in investment markets.

Negative Factors

EPS Flow-Through

Lack of EPS flow-through is mainly driven by a desire to reinvest elevated event-driven revenue.

Sales Deceleration

Modest deal slippage contributed to the (21)% y/y deceleration in closed sales, although some deals have been closed and the remainder is expected to close soon.

Valuation Concerns

Shares of BR are currently trading at 26.5x NTM EPS, representing a 4.4x premium to the S&P, suggesting a relatively full valuation with limited multiple expansion upside.

Broadridge Financial Solutions Business Overview & Revenue Model

Company Description

Broadridge Financial Solutions, Inc. provides investor communications and technology-driven solutions for the financial services industry. The company's Investor Communication Solutions segment processes and distributes proxy materials to investors in equity securities and mutual funds, as well as facilitates related vote processing services; and distributes regulatory reports, class action, and corporate action/reorganization event information, as well as tax reporting solutions. It also offers ProxyEdge, an electronic proxy delivery and voting solution; data-driven solutions and an end-to-end platform for content management, composition, and omni-channel distribution of regulatory, marketing, and transactional information, as well as mutual fund trade processing services; data and analytics solutions; solutions for public corporations and mutual funds; SEC filing and capital markets transaction services; registrar, stock transfer, and record-keeping services; and omni-channel customer communications solutions, as well as operates Broadridge Communications Cloud platform that creates, delivers, and manages communications and customer engagement activities. The company's Global Technology and Operations segment provides solutions that automate the front-to-back transaction lifecycle of equity, mutual fund, fixed income, foreign exchange and exchange-traded derivatives, order capture and execution, trade confirmation, margin, cash management, clearance and settlement, reference data management, reconciliations, securities financing and collateral management, asset servicing, compliance and regulatory reporting, portfolio accounting, and custody-related services. This segment also offers business process outsourcing services; technology solutions, such portfolio management, compliance, fee billing, and operational support solutions; and capital market and wealth management solutions. The company was founded in 1962 and is headquartered in Lake Success, New York.

How the Company Makes Money

Broadridge Financial Solutions generates revenue primarily through a combination of recurring fee-based services and transaction-based fees. The company's key revenue streams include investor communication solutions, which involve proxy voting, shareholder record-keeping, and regulatory communications. Additionally, Broadridge provides securities processing solutions, offering trade processing and settlement services to financial institutions. The company also earns from its data and analytics products, which offer insights and solutions to optimize business strategies for its clients. Significant partnerships with banks, broker-dealers, and asset managers enhance its service offerings, contributing to its steady revenue growth.

Broadridge Financial Solutions Financial Statement Overview

Summary

Broadridge Financial Solutions presents a strong financial position with significant revenue and profit growth, efficient operational management, and robust cash flow generation. The company maintains a healthy balance sheet despite moderate leverage, enhancing its ability to sustain operations and invest in future growth. Continued focus on equity enhancement could further solidify its financial health.

Income Statement

Broadridge Financial Solutions demonstrates strong revenue and profit growth. The TTM shows a robust gross profit margin of 30.2% and a net profit margin of 11.4%. EBIT and EBITDA margins are solid at 17.0% and 22.7% respectively. Revenue growth is sustained, with a 10.3% increase from 2023 to 2024. These figures indicate effective cost management and profitability.

Balance Sheet

The balance sheet shows moderate leverage with a debt-to-equity ratio of 1.64, indicating reliance on debt financing. Return on Equity (ROE) is healthy at 34.1%, showcasing efficient use of equity. The equity ratio is 27.1%, pointing to a balanced capital structure but suggests room for improving equity base.

Cash Flow

Cash flow metrics reveal a strong operating cash flow to net income ratio of 1.37, indicating efficient cash generation relative to profits. Free cash flow growth is impressive at 26.5% over the past year, reflecting strong cash management. The free cash flow to net income ratio stands at 1.25, highlighting robust cash conversion.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
6.68B	6.51B	6.06B	5.71B	4.99B	4.53B
	Gross Profit
2.02B	1.93B	1.79B	1.59B	1.42B	1.26B
	EBIT
1.14B	1.02B	936.40M	759.90M	678.70M	624.90M
	EBITDA
1.52B	1.51B	1.36B	1.22B	1.01B	924.20M
	Net Income Common Stockholders
759.10M	698.10M	630.60M	539.10M	547.50M	462.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
177.90M	305.20M	252.30M	224.70M	274.50M	476.60M
	Total Assets
2.86B	8.24B	8.23B	8.17B	8.12B	4.89B
	Total Debt
324.10M	3.58B	3.41B	3.84B	3.89B	1.79B
	Net Debt
146.20M	3.27B	3.16B	3.61B	3.61B	1.31B
	Total Liabilities
2.01B	6.07B	5.99B	6.25B	6.31B	3.54B
	Stockholders Equity
857.00M	2.17B	2.24B	1.92B	1.81B	1.35B
Cash Flow		Free Cash Flow
946.30M	943.20M	748.10M	370.40M	539.40M	499.50M
	Operating Cash Flow
1.04B	1.06B	823.30M	443.50M	640.10M	598.20M
	Investing Cash Flow
-362.00M	-148.00M	-80.40M	-110.40M	-2.65B	-441.70M
	Financing Cash Flow
-661.60M	-855.50M	-714.70M	-370.80M	1.80B	51.20M

Broadridge Financial Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 239.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BR, the sentiment is Positive. The current price of 239.91 is above the 20-day moving average (MA) of 234.99, above the 50-day MA of 237.01, and above the 200-day MA of 220.30, indicating a bullish trend. The MACD of 1.55 indicates Negative momentum. The RSI at 64.54 is Neutral, neither overbought nor oversold. The STOCH value of 85.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BR.

Broadridge Financial Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BR	78 Outperform	$28.64B	38.29	35.34%	1.43%	5.73%	11.41%
JKHY	76 Outperform	$13.41B	33.18	21.90%	1.21%	5.36%	8.62%
IT	75 Outperform	$31.11B	25.26	122.93%	―	6.10%	44.57%
CTSH	72 Outperform	$37.81B	16.96	16.21%	1.65%	1.98%	7.16%
WIT	68 Neutral	$31.45B	27.26	16.59%	2.10%	-3.41%	67.87%
Sector *	57 Neutral	$20.94B	10.43	-13.41%	2.52%	4.53%	-23.34%
FIS	51 Neutral	$39.50B	52.59	4.65%	1.98%	-17.38%	―

Broadridge Financial Solutions Corporate Events

Broadridge Unveils February 2025 Growth Strategy

On February 10, 2025, Broadridge Financial Solutions posted its February 2025 investor presentation online, outlining its growth strategy and financial performance. The company emphasized its unique business model and growth objectives, aiming for steady earnings and capital return, thus enhancing shareholder value. The presentation highlighted potential risks and uncertainties that could impact future results, aligning with forward-looking statements. Broadridge also discussed its focus on key performance indicators and the ongoing use of Non-GAAP financial measures to assess its financial health.