BROADRIDGE FINANCIAL SOLUTIONS, INC. (BR): what the price requires
At today's price, BROADRIDGE FINANCIAL SOLUTIONS, INC. (BR) is priced for +6.6% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/BR
Headline
| Field | Value |
|---|---|
| Ticker | BR |
| Company | BROADRIDGE FINANCIAL SOLUTIONS, INC. |
| Current price | $150.85/sh |
| Composition | Regulatory (ICS) 19% / Data-driven fund solutions (ICS) 7% / Issuer (ICS) 4% / Customer communications (ICS) 10% / Equity and other (ICS event-driven) 2% / Mutual funds (ICS event-driven) 3% / Distribution revenues (ICS) 30% / Capital markets (GTO) 16% / Wealth and investment management (GTO) 10% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 5.6% |
| Operating margin today | 15.6% |
| Margin compression implied | -10.0pp |
| Implied growth | 6.6% |
| Multiple paid | 19x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.1% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7pp.
Reconcile: at the x-ray's 9.3% required return this reads ~14.2%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.17σ |
| cohort percentile (of 210 peers) | 53 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.48x | 5 | expensive |
| Earnings | 1.66x | 5 | expensive |
| Relative | 0.93x | 5 | justifies |
| Growth | 0.93x | 4 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.7%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $332.24 | 0.45x | yes | FCF base $1.4B, growth 8% (input: historical growth), terminal g 4.0%, WACC 7.7%, 6yr projection |
| DCF Exit Multiple | Growth | $198.49 | 0.76x | yes | Exit EV/EBITDA: 15.0x / 17.0x / 19.0x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $161.57 | 0.93x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.7x / 20.0x / 23.3x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $137.97 | 1.09x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $101.69 | 1.48x | yes | BV/sh $24.09, ROE (TTM) 39.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $230.36 | 0.65x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $127.14 | 1.19x | yes | Rev $7.3B, growth 8% (input: historical growth; tapered), Terminal P/S: 2.0x / 2.4x / 2.8x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $327.25 | 0.46x | yes | EPS $9.35, growth 35% (input: historical EPS growth), PEG=0.46 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $56.35 | 2.68x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.99B × (1−21%) / WACC 7.7% → EPV (no growth) |
| Residual Income | Asset | $160.56 | 0.94x | yes | BV $24.09 + 5yr PV of (ROE (TTM) 39.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $71.19 | 2.12x | yes | √(22.5 × EPS $9.35 × BVPS $24.09) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $119.13 | 1.27x | yes | EBITDA $1.25B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $90.92 | 1.66x | yes | FCF $1317.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $83.28 | 1.81x | yes | SBC-adj FCF $1.23B (FCF $1.32B − SBC $0.08B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $301.69 | 0.50x | yes | EPS $9.35 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $13.89 | 10.86x | yes | BV $24.09 × (ROIC 4.4% / WACC 7.7%) |
| P/Sales Sector | Relative | $93.87 | 1.61x | yes | Revenue $7.32B × sector P/S 1.5x |
| PEG Fair Value | Relative | $350.63 | 0.43x | yes | EPS $9.35 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $101.08 | 1.49x | yes | EPS $9.35 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.9b |
| Net debt / NOPAT (after-tax) | 3.36x |
| Net debt / operating income (pre-tax) | 2.66x |
| Interest coverage | 9.4x |
| Share count CAGR (buyback) | -0.3% |
| Burning cash | no |
Bullet Takeaways
At about $137 the market pays roughly 17 times operating income, which implies only about 4.2% annual operating growth for five years. For a business that just grew recurring revenue 7% and raised guidance, that is a modest bar, and the multiple sits in the lower half of the peer range.
The franchise is a near-monopoly in unglamorous plumbing. Broadridge processes proxy voting and investor communications for most of the financial industry, earns a 39% return on equity, and generates over $1.1 billion of targeted free cash flow.
The capital-allocation question is the watch item. Broadridge funds steady tuck-in acquisitions, $294 million year to date, plus dividends and buybacks, partly with debt of about $3.2 billion. The strategy has worked, but it is a leveraged compounding model that depends on continued execution.
Bull Case
Start with what the market is pricing, then weigh it against the business. At about $137 (June 27, 2026) and 17 times operating income, the inversion reads the price as embedding only about 4.2% annual operating growth for five years, and the multiple sits in the lower half of the peer range. That is a pessimistic assumption for a company that just grew total revenue 8% to $1,954 million, grew recurring revenue 7% to $1,288 million, lifted diluted EPS 15% to $2.36, and raised its full-year guidance. When the market prices 4% growth and the company delivers 7% recurring growth with rising guidance, the gap is the bull case.
The quality of the franchise is what makes the modest implied growth look like an opportunity. The 10-K describes Broadridge's two segments, Investor Communication Solutions and Global Technology and Operations, and the first is effectively the plumbing of corporate governance: it processes proxy voting and investor communications for a vast share of the financial industry. The filing notes the business competes against "independent proxy distribution service providers, transfer agents, proxy" firms, but Broadridge's scale and regulatory entrenchment make it the default provider, and its revenue is "derived from both recurring and event-driven activity." Recurring, regulation-mandated processing is about as durable a revenue stream as exists, which is why the business earns a 39% return on equity on an asset-light base.
The forward indicators point up, not down. CEO Tim Gokey highlighted a sales pipeline exceeding $1 billion, up 20% year over year, with deal origination up 25%, and the company raised its fiscal 2026 outlook to recurring revenue growth at or above 7% in constant currency and adjusted EPS growth of 10% to 12%. Broadridge targets over $1.1 billion of free cash flow and returns capital steadily through dividends and buybacks. A wide-moat, recurring-revenue compounder priced for 4% growth while delivering 7% is the kind of mispricing the bull case targets.
Bear Case
The capital-allocation model is where the bear case lives, because Broadridge's growth is partly manufactured by acquisition and leverage rather than purely organic. The company completed the CQG acquisition for $173 million and four tuck-in deals totaling $294 million year to date, on top of returning $681 million to shareholders through dividends and buybacks. To fund that, it carries about $3.2 billion of gross debt against only $305 million of liquid assets. The strategy of bolting on small acquisitions while returning cash and using debt has worked, but it is a leveraged roll-up at its core. Each tuck-in must be integrated and earn its keep, and the reported return on equity of 39% is flattered by a thin book value of about $24 per share, which leverage amplifies. A roll-up that stops finding accretive deals, or overpays for them, sees its growth and its returns fade at once.
The sales softness is a real, if subtle, warning. Broadridge trimmed its closed-sales guidance to $240 to $290 million, citing longer sales cycles for larger platform deals. Management framed the pipeline as strong, but lengthening sales cycles for the biggest contracts mean revenue conversion is slowing at the high end, exactly where the next leg of growth is supposed to come from. A pipeline that does not convert is just a hope, and a stock that trades at a premium absolute price needs that conversion to materialize.
The valuation, while modest on the inversion, is not cheap on the conservative frames. The price-to-earnings is around 17 times operating income, but the Earnings Power Value model, which capitalizes normalized operating income with no growth, lands at just $58, and the Graham Number at $71, both far below the price. Those frames say that strip out the growth and the acquisition contribution, and the standalone earnings do not support the price. The business is genuinely high quality and the cash flow is real, so this is not a distress case. It is a case of paying a full price for a leveraged compounder whose organic growth is steady but unspectacular, whose largest deals are taking longer to close, and whose returns lean on acquisitions and a thin equity base.
Valuation
Broadridge is priced as a whole company on its operating earnings. At about $137 the market pays roughly 17 times company-wide operating income, which inverts to operating-profit growth of about 4.2% per year for five years at an 8.1% cost of capital. The pace is within what the company has recently delivered, and the multiple sits in the lower half of the peer range, so the priced-in assumption is modest, not stretched.
The model spread is wide and reflects the gap between the growth view and the standalone-earnings view. The relative frame lands near the price, with Relative Valuation at $162, DCF Exit Multiple at $188, and the Two-Stage DDM right at the price. The earnings-power frame is the conservative one and lands far below: Earnings Power Value at $58 and the Graham Number at $71, because they capitalize normalized earnings with no growth credit.
The characterization is that relative-multiple and growth-DCF justify the price while earnings-power says expensive, which is the right read for a moaty compounder: it is worth more than its no-growth earnings but not infinitely so. The deciding variables are recurring-revenue growth against the at-or-above-7% guide, the conversion of the $1 billion-plus pipeline into closed sales, the discipline and integration of the tuck-in acquisitions, and free-cash-flow generation against the $1.1 billion target.
Catalysts
Third-quarter fiscal 2026 results, reported in late April, were the recent driver and they beat. Total revenue rose 8% to $1,954 million, recurring revenue rose 7% to $1,288 million, diluted EPS rose 15% to $2.36, and adjusted EPS rose 11% to $2.72. The company raised its fiscal 2026 outlook to recurring revenue growth at or above 7% in constant currency and adjusted EPS growth of 10% to 12%.
The forward indicators and capital deployment are the standing catalysts. The sales pipeline exceeds $1 billion, up 20% year over year, with deal origination up 25%, though closed-sales guidance was trimmed to $240 to $290 million on longer sales cycles for larger platform deals. On capital allocation, Broadridge completed the CQG acquisition for $173 million as part of four tuck-ins totaling $294 million year to date, returned $681 million to shareholders, and targets more than $1.1 billion of free cash flow.
The watch items are recurring-revenue growth against the raised guide, the conversion of the large pipeline into closed sales, the pace and integration of tuck-in acquisitions, free-cash-flow generation, and the balance between debt-funded M&A and shareholder returns. Sources: Broadridge Q3 fiscal 2026 results and 8-K (sec.gov, stocktitan.net), earnings call coverage (finance.yahoo.com, fool.com, investing.com, biggo.com); segment and revenue-model language from the FY2025 10-K (accession 0001628280-25-037656).
Peer Cohorts (Per Segment, With Filing Citations)
Investor Communication Solutions (reported)
- DFIN (Donnelley Financial Solutions, Inc.)
- (no filing in the citation store)
- EFX (EQUIFAX INC)
- (no filing in the citation store)
- MMS (Maximus, Inc.)
- (no filing in the citation store)
- SPGI (S&P Global Inc.)
- (no filing in the citation store)
- FICO (Fair Isaac Corp)
- (no filing in the citation store)
Global Technology and Operations (reported)
- SSNC (SS&C TECHNOLOGIES HOLDINGS, INC.)
- (no filing in the citation store)
- JKHY (JACK HENRY & ASSOCIATES, INC.)
- (no filing in the citation store)
- FIS (Fidelity National Information Services, Inc.)
- (no filing in the citation store)
- FISV (FISERV INC)
- (no filing in the citation store)
- ACIW (ACI WORLDWIDE, INC.)
- (no filing in the citation store)
- DOX (AMDOCS LIMITED)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.