Broadridge Financial Solutions, Inc.BRNYSE

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DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $340.59 per share(market-calibrated)

+81.6%

Upside to Fair Value

Current

$187.51

Pure Model

$365.24

Fair Value

$340.59

Bull Case

$468.90

Bear Case

$280.45

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

0.50%

Calibrated Growth

2.61%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $365.24.

What's Driving This Ratingfor BR

✓

CapEx already efficient

CapEx at 1.38% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 22.07% — below the sector mature average of 25.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $2.6B (24.04% margin).

→

Moderate revenue growth

Analyst consensus projects 6.88% revenue growth, fading to 3.75% by Year 10. Revenue reaches $10.8B (vs $6.9B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $307.07/share (24.1x terminal FCF) while exit multiple gives $423.40/share (36.5x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 325bps below the model's 3.75%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 76.70% indicates efficient cash generation. FCF reaches $2.4B by Year 10 (22.13% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.98

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)8.91%

Cost of Debt

Pre-tax Cost of Debt3.32%

Tax Rate20.70%

After-tax Cost of Debt2.64%

Equity Weight (E/V)86.39%

Debt Weight (D/V)13.61%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (86.39% × 8.91%) + (13.61% × 2.64%)

= 8.05%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$7.4B	$8.1B	$8.8B	$9.6B	$10.8B
EBIT	$1.6B	$1.8B	$1.9B	$2.2B	$2.6B
Tax	$336M	$370M	$403M	$460M	$536M
NOPAT	$1.3B	$1.4B	$1.5B	$1.8B	$2.1B
+ Depreciation	$354M	$390M	$424M	$462M	$519M
- Capex	$102M	$112M	$122M	$133M	$149M
- Δ NWC	$47M	$42M	$39M	$39M	$39M
Free Cash Flow	$1.5B	$1.7B	$1.8B	$2.1B	$2.4B
Discount Factor	0.925	0.793	0.679	0.582	0.461
Present Value	$1.4B	$1.3B	$1.2B	$1.2B	$1.1B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.4B

Terminal Growth Rate3.75%

WACC8.05%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$57.5B

PV of Terminal Value$26.5B

Exit Multiple Method

Year 10 EBITDA$3.1B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$87.1B

PV of Terminal Value$40.1B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$12.3B

PV of Terminal Value$26.5B

Enterprise Value$38.9B

(-) Net Debt$2.9B

Equity Value$36.0B

Shares Outstanding117M

Price per Share$307.07

Exit Multiple Method

PV of Projected FCFs$12.3B

PV of Terminal Value$40.1B

Enterprise Value$52.5B

(-) Net Debt$2.9B

Equity Value$49.6B

Shares Outstanding117M

Price per Share$423.40

Pure Model Fair Value

$365.24

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
6.05%	$474.43	$506.86	$553.36	$582.88	$558.73
7.05%	$397.13	$413.98	$435.94	$465.74	$508.48
8.05%	$343.00	$352.96	$365.24	$380.74	$400.94
9.05%	$301.77	$308.15	$315.74	$324.91	$336.20
10.05%	$268.68	$273.01	$278.02	$283.90	$290.89

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$280.45

49.6% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.22

Base Case

$365.24

94.8% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 0.98

Bull Case

$468.90

150.1% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 0.83

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth6.88%

Year 3 Revenue Growth5.50%

Year 5 Revenue Growth4.60%

Year 7 Revenue Growth4.26%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin22.07%

Terminal EBIT Margin25.00%

Tax Rate20.70%

Historical Capex / Rev1.38%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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