Broadridge Financial Solutions Inc (BR)

Conclusion

Broadridge Financial Solutions provides investor communication and technology solutions to the financial services industry, including proxy distribution, shareholder voting and trade processing. On 9 November 2026 the shares closed at 192.34 USD, giving a market capitalisation of 21.75 billion USD and an enterprise value of 25.07 billion USD.

The verdict is undervalued. Today's P/E of 20.6 compares with a ten-year median of 36.1, a premium of -42.9%, and EV/EBITDA of 13.6 compares with a median of 19.6, a premium of -30.5%. The discounted cash flow gives 245.95 USD per share at a discount rate of 9.4%. The fair value band runs from 214.14 to 321.21 USD with a midpoint of 267.68 USD, a margin of safety of 39.2%. The reverse DCF implies 4.4% annual growth, while revenue grew at 8.4% over five years and free cash flow per share at 19.0%.

The strongest supports are a return on invested capital of 19.0% against a weighted average cost of capital of 8.6%, a Piotroski score of 8 out of 9, and free cash flow conversion of 129.3% on a trailing twelve-month basis. The weakest numbers are the net debt to EBITDA of 1.80 and the debt to equity of 1.38, which leave less room if earnings fall, and the next-year estimate revision of -0.4% over ninety days. A sustained drop in the operating margin from 17.0% would also weaken the case.

Financial health

Financial strength is green: the current ratio of 1.21, the interest coverage of 13.1 and the net debt to EBITDA of 1.80 are all assessed as good. The quick ratio is 1.02 and the debt to equity is 1.38, which is higher and reflects a leveraged balance sheet. The Altman Z-score is 4.38, in the safe zone, although the Altman model was designed for manufacturers and this company is not one. Insolvency risk is low, at about 1.1% by the estimate of the Ohlson model over one to two years. Debt has fallen 10.6% a year over five years in annual figures, which supports the balance sheet.

Earnings quality

Earnings quality is green, and it is the strongest part of the analysis. Free cash flow conversion is 129.3% on a trailing twelve-month basis and 114.7% over five years, so reported profit is backed by cash. The accrual ratio of -2.5% points to cash earnings exceeding reported earnings. Stock-based compensation is 1.3% of revenue, and free cash flow after it is 1.27 billion USD. The share count has fallen at an annual rate of 0.1% over five years, which reflects buybacks. The Piotroski score is 8 of 9 and the Beneish M-score of -2.54 is read as unlikely to signal manipulation. The company beat earnings estimates in all eight of the last quarters, with an average surprise of 8.2%. Estimate revisions are slightly negative, with the current-year estimate down 0.1% over ninety days.

Profitability

Profitability is green. The gross margin is 31.5% against a ten-year median of 28.4%, the operating margin is 17.0% against 14.4%, and the net margin is 14.0% against 10.6%. Operating margin stability is 10.3%. Return on invested capital is 19.0% against a weighted average cost of capital of 8.6%, and the given ROIC minus WACC value is 10.4%, which the model labels as creating value. The five-year median ROIC is 14.7%. Return on equity is 40.3%, but the DuPont split shows that this is driven mainly by leverage: a net margin of 15.0%, an asset turnover of 0.84 and an equity multiplier of 3.15. Return on equity therefore overstates the underlying economics relative to ROIC.

Growth

Growth is green. Revenue compound growth is 7.3% over three years, 8.4% over five years and 10.0% over ten years. Earnings per share grew at 21.9% over three years, 15.6% over five years and 14.3% over ten years. Free cash flow per share grew at 20.2%, 19.0% and 13.9% over the same periods. Revenue has grown in all ten of the last comparable years. The next-year earnings estimate implies growth of 9.5%, which is above the five-year revenue growth rate. Forward growth depends on keeping that pace of revenue expansion.

Valuation

Valuation is green. The P/E of 20.6 compares with a ten-year median of 36.1, a premium of -42.9%. EV/EBITDA is 13.6 against a median of 19.6, a premium of -30.5%, and price to free cash flow is 16.0 against 28.1, a premium of -43.1%. The DCF gives 245.95 USD per share using a discount rate of 9.4% and a long-term growth rate of 2.5%. The fair value from historical multiples is 289.40 USD. The fair value band runs from 214.14 to 321.21 USD with a midpoint of 267.68 USD, and the margin of safety is 39.2% at a price of 192.34 USD. The fair value figures are an order of magnitude built on fixed assumptions, including a 5% equity risk premium and capped growth, and are not a price target. The dividend yield is 2.1%, the forward yield is 2.3%, and the payout on free cash flow is 33.1%.

Risks

The main risk is leverage. A net debt to EBITDA of 1.80 and a debt to equity of 1.38 mean that a fall in earnings would weigh on the balance sheet more than it would for a less indebted company. The estimate revisions are also weak: the next-year estimate was revised down 0.4% over ninety days, with one downward revision and no upward revisions in the last thirty days. A decline in the operating margin from 17.0% would reduce return on invested capital, which currently exceeds the cost of capital by 10.4 points on the given measure. The Altman model does not fit this business, so its safe reading should be treated with caution. The analysis has limits: it has no debt maturity schedule and no revenue split by segment, so refinancing risk and the contribution of each business line cannot be assessed. Several values are not available from the inputs, including a DCF terminal-value check and any further detail on the debt structure.