Here's Why Investors Should Retain Broadridge (BR) Stock Now
Broadridge Financial Solutions’ BR stock has gained 48.5%, significantly outperforming 14.1% and 30.4% growth of the industry it belongs to and the Zacks S&P 500 Composite, respectively.
BR has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Its earnings for fiscal 2024 and 2025 are anticipated to grow 10.1% and 8.9% from the year-ago reported levels, respectively.
Factors That Auger Well
Broadridge maintains a strong business model with multiple streams for generating recurring revenues. It provides a clear picture of its organic revenues in the near to mid term. Recurring fees, encompassing net new business, internal expansion and acquisition-related benefits generate a significant portion of the company’s income. Total revenues increased 6%, 14% and 10% in fiscal 2023, 2022 and 2021, year over year, respectively.
Broadridge Financial Solutions, Inc. Price and EPS Surprise
Broadridge Financial Solutions, Inc. price-eps-surprise | Broadridge Financial Solutions, Inc. Quote
Itiviti’s acquisition has increased BR’s presence in the APAC and EMEA, as well as escalated its global technology and operations segment’s performance. The segment’s revenues are expected to increase 9% in fiscal 2024. Itiviti is an effective strategic fit for the company’s capital market franchise and adds to international revenue growth.
Broadridge's current ratio (a measure of liquidity) at the end of second-quarter fiscal 2024 was 1.4, higher than 1.26 at the end of the year-ago quarter. Increasing current ratio is desirable as it indicates that the company should not have problems meeting its short-term obligations.
Some Risks
Broadridge faces significant competition. Its Investor Communication Solutions business competes with companies that provide investor communication and corporate governance solutions. We believe that BR’s ability to maintain or increase its market share and profitability could be negatively affected by strong competition.
The company is heavily exposed to the securities industry (including brokerages and asset managers). A decline in markets will negatively affect the industry and Broadridge’s business.
Zacks Rank and Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks from the broader Zacks Business Services sector are Booz Allen Hamilton BAH and Barrett Business Services BBSI.
Booz Allen Hamilton sports a Zacks Rank of 1 (Strong Buy) at present. BAH has a long-term earnings growth expectation of 12.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
BAH delivered a trailing four-quarter earnings surprise of 12.7%, on average.
Barrett Business Services currently carries a Zacks Rank of 2 (Buy). BBSI has a long-term earnings growth expectation of 14%.
BBSI delivered a trailing four-quarter earnings surprise of 77.7%, on average.
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Broadridge Financial Solutions, Inc. (BR) : Free Stock Analysis Report
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