Back to top

Analyst Blog

Broadridge Financial Solutions, Inc. (BR - Snapshot Report) is set to report second-quarter fiscal 2014 results on Feb 6. Last quarter, the company posted a positive earnings surprise of 95.0%. Let us see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Broadridge’s first-quarter 2014 results were impressive as both the top and bottom lines surpassed the Zacks Consensus Estimate.

Broadridge’s cost reduction initiatives and solid growth in net new businesses are the positives going forward. We remain optimistic on Broadridge’s strategic acquisitions, new product launches, share repurchase program and dividend hike. We also believe that its close association with Accenture (ACN - Analyst Report) will create long-term opportunities for the company.
 
However, we remain concerned by the pricing pressures caused by significant competition from companies such as Barrett Business Services (BBSI - Snapshot Report) and DST Systems Inc.
Earnings Whispers?

Our proven model does not conclusively show that Broadridge will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 28 cents. Hence, the difference is 0.00%.

Zacks Rank #1 (Strong Buy): Note that stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating earnings.

The combination of Broadridge’s Zacks Rank #1 and +0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here is another company, which investors may want to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter:

Affymetrix Inc. (AFFX - Analyst Report), Earnings ESP of +14.29% and a Zacks Rank #1

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%