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Broadridge Financial Solutions Inc.

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Broadridge reported disappointing second-quarter fiscal 2019 results, with earnings and revenues lagging the Zacks Consensus Estimate. The company has a strong business model, backed by higher recurring fee revenues. Increasing demand for technology solutions has enabled the company to increase investments in digital, AI, cloud and blockchain particularly via acquisitions. Broadridge continues to focus on enhancing its internal growth with strategic buyouts. Despite such positives, Broadridge continues to grapple with client concentration. Strong competition can negatively affect Broadridge’s ability to increase its market share and profitability. Multiple acquisitions increase the company’s exposure to integration risks and higher expenses. High debt may limit Broadridge’s future expansion and worsen its risk profile. Shares of Broadridge have underperformed its industry in the past year.

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