Shares of Broadridge Financial Solutions, Inc. BR have had a decent run over the past month. The stock has risen 5.7% compared with the industry’s 7.6% growth. The Zacks S&P 500 composite barely moved during the said time frame.
BR’s fourth-quarter fiscal 2026 earnings are expected to be up 5.6% year over year. Earnings for fiscal 2026 and 2027 are projected to rise 11.7% and 9.7% year over year, respectively. Revenues are expected to increase 7.7% in fiscal 2026 and 4.5% in fiscal 2027.
Factors That Bode Well for BR
Broadridge Financial, a provider of investor communications and technology-driven solutions to banks, broker-dealers, asset managers and corporate issuers, benefits from a strong business model, backed by higher recurring fee revenues. A major portion of the total revenues is derived from recurring fees, driven by new client growth, internal expansion and acquisitions. During the third quarter of fiscal 2026, recurring revenues accounted for nearly 66% of total revenues. Management expects at least 7% recurring revenue growth on a constant-currency basis for fiscal 2026.
Broadridge Financial Solutions, Inc. Revenue (TTM)
Broadridge Financial Solutions, Inc. revenue-ttm | Broadridge Financial Solutions, Inc. Quote
BR’s Investor Communication Solutions is also experiencing growth, aided by strong investor participation and continued growth in equity and mutual fund positions. The company reported that its Governance recurring revenues increased 8% year over year in the third quarter of fiscal 2026. Total equity position growth reached 15%, while revenue-generating equity positions increased 11% during the said time frame.
The Global Technology and Operations segment continues to perform well for the company. Strong demand for BR’s post-trade processing solutions and the recent acquisition of CQG, a leading provider of futures and options trading technology, are expected to boost Broadridge's institutional trading capabilities by adding execution management, algorithmic trading and market connectivity solutions.
The company has demonstrated a strong commitment to its shareholders through consistent dividend payments, despite the fluctuations in its cash position. BR paid dividends of $331 million, $368.2 million and $402.3 million in fiscal 2023, 2024 and 2025, respectively. This consistency underscores its dedication to creating long-term value for investors.
Risks to Watch
Global service providers operate in a fiercely competitive landscape. BR faces stiff competition from DST Systems Inc., investor communication and corporate governance solutions firms, brokerage firms and transfer agents across segments. This competition fuels innovation across the industry while driving pricing pressures. Ongoing technology investments increase the challenge of maintaining profitability while competing for growth.
BR is heavily exposed to the securities industry (including brokerages and asset managers). Any significant market downturn will negatively impact both the industry and the company's financial health.
BR had a current ratio of 0.94 at the end of the third quarter of fiscal 2026, lower than the industry's average of 1.9. A current ratio below 1 often suggests that a company may not be well positioned to meet its short-term obligations.
Broadridge Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
A couple of better-ranked stocks in the Internet-Software industry are HubSpot, Inc. HUBS and GitLab Inc. GTLB.
HubSpot, Inc. sports a Zacks Rank #1 at present. It has a long-term earnings growth expectation of 20.8%. HUBS delivered a trailing four-quarter earnings surprise of 5%, on average.
GitLab also flaunts a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 5.8%. GTLB beat on earnings in each of the trailing four quarters, delivering an average surprise of 30.1%.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Broadridge Financial Solutions, Inc. (BR): Free Stock Analysis Report
HubSpot, Inc. (HUBS): Free Stock Analysis Report
GitLab Inc. (GTLB): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).