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Broadridge Financial Solutions Llc (BR)
NYSE:BR
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Broadridge Financial Solutions
(NYSE:BR)78Outperform
Positive Factors
Capital Markets Recovery
Broadridge clients are benefitting from elevated trading volumes and optimism surrounding a recovery in capital markets and M&A volumes.
Negative Factors
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 (BR) vs. S&P 500 (SPY)
Market Cap
$28.23B
Dividend Yield1.39%
Average Volume (3M)454.57K
Price to Earnings (P/E)37.7
Beta (1Y)0.78
Revenue Growth5.73%
EPS Growth11.41%
CountryUS
Employees14,600
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)6.39
Shares Outstanding117,018,684
10 Day Avg. Volume512,456
30 Day Avg. Volume454,574
Financial Highlights & Ratios
PEG Ratio3.31
Price to Book (P/B)N/A
Price to Sales (P/S)4.29
Price to Cash Flow (P/CF)30.30
P/FCF Ratio29.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$244.33Price Target Upside1.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Broadridge Financial Solutions Business Overview & Revenue Model
Company DescriptionBroadridge Financial Solutions, Inc. is a global fintech leader providing technology-driven solutions to banks, broker-dealers, asset managers, and corporate issuers. The company operates in the financial services sector, focusing on investor communications and technology-driven solutions. Its core products and services include investor communications, securities processing, and data and analytics solutions, which help clients manage their business operations efficiently, reduce risk, and enhance their client engagement.
How the Company Makes MoneyBroadridge 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.87
Very Positive
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.75
Positive
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.82
Very Positive
| 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 | ||||
| 305.20M | 305.20M | 252.30M | 224.70M | 274.50M | 476.60M | Total Assets |
| 8.24B | 8.24B | 8.23B | 8.17B | 8.12B | 4.89B | Total Debt |
| 3.58B | 3.58B | 3.41B | 3.84B | 3.89B | 1.79B | Net Debt |
| 3.27B | 3.27B | 3.16B | 3.61B | 3.61B | 1.31B | Total Liabilities |
| 6.07B | 6.07B | 5.99B | 6.25B | 6.31B | 3.54B | Stockholders Equity |
| 2.17B | 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
Positive
241.83
Price Trends
233.95
Positive
228.90
Positive
216.80
Positive
Market Momentum
1.49
Negative
58.47
Neutral
79.19
Neutral
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 241.83 is above the 20-day moving average (MA) of 239.75, above the 50-day MA of 233.95, and above the 200-day MA of 216.80, indicating a bullish trend. The MACD of 1.49 indicates Negative momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 79.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BR.
Broadridge Financial Solutions Risk Analysis
Broadridge Financial Solutions disclosed 22 risk factors in its most recent earnings report. Broadridge Financial Solutions reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Broadridge Financial Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $171.61B | 57.36 | 16.92% | 0.65% | 13.73% | 9.93% | |
78 Outperform | $28.23B | 37.74 | 34.07% | 1.39% | 5.73% | 11.41% | |
78 Outperform | $22.06B | 29.68 | 11.64% | 1.11% | 6.89% | 26.17% | |
78 Outperform | $2.37B | 21.51 | 18671.82% | 0.53% | 21.70% | 43.10% | |
77 Outperform | $12.65B | 31.30 | 20.51% | 1.27% | 5.36% | 8.62% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
51 Neutral | $37.02B | 49.29 | 2397.44% | 1.99% | -17.38% | ― |
* Technology Sector Average
Performance Comparison
BR
Broadridge Financial Solutions
241.83
43.81
22.12%
FIS
Fidelity National Info
69.89
1.41
2.06%
INTU
Intuit
598.07
-37.76
-5.94%
JKHY
Jack Henry & Associates
177.02
6.68
3.92%
SSNC
SS&C Technologies Holdings
86.29
24.79
40.31%
EVTC
Evertec
37.22
0.51
1.39%
Broadridge Financial Solutions Earnings Call Summary
Earnings Call Date: Jan 31, 2025 | % Change Since: 1.13% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and strategic growth in key segments such as governance, capital markets, and wealth management. However, there were some challenges with flat closed sales, moderate fund position growth, and FX headwinds. Overall, the company remains positive about its fiscal 2025 outlook.Highlights
Strong Financial Performance
Broadridge delivered a 9% increase in recurring revenues and a 70% growth in adjusted EPS to $1.56.
Governance Business Growth
ICS recurring revenues rose 9% constant currency, driven by strong revenue from sales and 11% equity position growth.
Record Event-Driven Revenues
Achieved a new quarterly record for event-driven revenues, surpassing the previous high set in fiscal 2018.
Capital Markets Segment Expansion
Reported a 6% recurring revenue growth in capital markets due to innovations like AI-enabled trading solutions.
Wealth and Investment Management Growth
Revenues grew 12%, largely driven by the SIS acquisition, contributing to the expansion of the Canadian wealth business.
Strategic Investments in Innovation
Continued significant investments in product innovation, AI, and tech capabilities supporting long-term growth.
Lowlights
Flat Closed Sales Growth
Year-to-date closed sales were $103 million, essentially flat compared to fiscal 2024, with larger deals slipping into the third quarter.
Moderate Fund Position Growth
Fund position growth remained stable at 5%, which is at the lower end of its historic range.
Lower License Revenues Impact
A 3-point headwind to capital markets growth due to lower license revenues.
FX Headwinds
Recent strengthening of the dollar expected to be a 50 basis points headwind to recurring revenue and adjusted EPS growth.
Company Guidance
In the Broadridge Fiscal Second Quarter 2025 Earnings Call, the company provided a strong outlook for the fiscal year, reaffirming guidance across all key metrics. The guidance includes a 6% to 8% growth in recurring revenue, an adjusted EPS growth of 8% to 12%, and closed sales expected to reach between $290 million and $330 million. The company also anticipates generating a free cash flow conversion of 95% to 105%, which it plans to use for share repurchases or incremental M&A. Additionally, Broadridge highlighted its commitment to ongoing investments in product innovation, AI, and technology capabilities, which are expected to support long-term growth.Broadridge Financial Solutions Corporate Events
Business Operations and StrategyFinancial Disclosures
Broadridge Unveils February 2025 Growth Strategy
Neutral
Feb 10, 2025
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.
Executive/Board Changes
Broadridge Appoints Ashima Ghei as New CFO
Positive
Dec 16, 2024
Broadridge Financial Solutions has appointed Ashima Ghei as its new Chief Financial Officer, effective immediately. Having served as interim CFO since July 2024, Ghei has been pivotal in advancing the company’s financial strategy. Her previous leadership roles at Broadridge and her extensive experience at American Express highlight her capability to drive growth and innovation, positioning Broadridge for continued financial success and shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.