Broadridge Financial Solutions, Inc. BR stock has gained 16.1% over the past three months compared with the industry’s 17.4% growth and the Zacks S&P 500 Composite's 1.9% return.
Three-Month Share Price Performance
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Let us delve deeper into the factors that have contributed to the company’s strong performance.
High Recurring Revenue Visibility & Durable Growth
Broadridge’s recurring revenue model provides high visibility, supported by 98% client retention and a $470 million backlog, representing about 10% of fiscal 2026 recurring revenues. Fiscal 2026 recurring revenues rose 8% on a constant-currency basis to $4.88 billion, including 6% organic growth. The sales pipeline increased more than one-third year over year, while record fourth-quarter closed sales of $158 million and continued position growth support management’s fiscal 2027 guidance for 6-8% recurring revenue growth and 8-12% adjusted EPS growth. The combination of high retention, backlog conversion and a larger pipeline should support steady organic growth over the next several years. This visibility reduces reliance on near-term market conditions and reinforces the durability of Broadridge’s earnings profile.
Margin & Earnings Rise Drive Growth Outlook
BR’s operating income increased 10% to $546.2 million in the fourth quarter of fiscal 2026, while operating margin expanded 50 basis points to 24.6%. Adjusted operating income rose 7% to $598 million, while net earnings increased 6% to $398 million and adjusted net earnings rose 5% to $442 million.
Management expects $25 million of artificial intelligence-driven productivity savings in fiscal 2027, which should help fund ongoing investments and support adjusted operating margin expansion to about 21% from 20.5% in fiscal 2026. This points to continued operating leverage and earnings growth as productivity initiatives scale.
Strong Cash Flow Supports Greater Capital Returns
Broadridge generated $1.35 billion in operating cash flow and $1.23 billion in free cash flow in fiscal 2026, representing 110% conversion of adjusted net earnings. The company returned more than $1 billion to shareholders through dividends and net share repurchases. Strong cash generation supports continued investment and acquisitions while funding shareholder returns, including a 12% dividend increase and ongoing buybacks.
BR’s Zacks Rank & Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks in the broader Computer and Technology sector are Analog Devices, Inc. ADI and Applied Materials, Inc. AMAT.
Analog Devices carries a Zacks Rank #2 (Buy) at present. It has a long-term earnings growth expectation of 25%.
ADI delivered a trailing four-quarter earnings surprise of 4.8%, on average.
Applied Materials also holds a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 28.1%.
AMAT beat earnings estimates in each of the trailing four quarters, with an average earnings surprise of 5.5%.
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Broadridge Financial Solutions, Inc. (BR): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).