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Broadridge (BR) and IBM Tie Up on Hybrid Cloud Capabilities

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Broadridge Financial Solutions, Inc. (BR - Free Report) has partnered with International Business Machines (IBM - Free Report) to create cloud-based solutions for clients in the financial services space.

As part of this collaboration, Broadridge will develop The Broadridge Private Cloud powered by IBM, using the Red Hat OpenShift platform. This will help the company manage workloads across its overall hybrid cloud infrastructure and enhance capabilities around next-gen and mission-critical solutions. It will transfer a significant part of its global infrastructure to IBM.

We observe that shares of Broadridge have gained 30.4% over the past year, outperforming the 28.5% growth of the industry it belongs to.

Accelerating Shift to Hybrid Cloud

The move is part of Broadridge’s efforts to accelerate its shift to a hybrid cloud model and provide next-generation SaaS solutions to clients. Consistent demand for technology solutions globally should help Broadridge gain significantly from its SaaS based offerings.

Mark Schlesinger, Broadridge's chief information officer stated, "Accelerating our cloud strategy will enable clients to leverage an industry-leading, highly flexible and resilient technology platform and allow Broadridge to accelerate our product roadmap, providing our clients with faster access to new industry solutions incorporating the ABCDs of InnovationTM (AI, Blockchain, Cloud, Digital).”

With increasing demand for technology solutions, Broadridge has ramped up investments in digital, AI, cloud and blockchain. These investments should be beneficial in the long run but weigh on the company’s bottom line in the near term.

Zacks Rank & Other Stocks to Consider

Broadridge currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are S&P Global (SPGI - Free Report) and Booz Allen Hamilton (BAH - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected EPS (three to five years) growth rate for S&P Global and Booz Allen is 10% and 13%, respectively.

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