Broadridge Financial Solutions Inc. BR is set to report first-quarter 2018 earnings results on Nov 8.

In the last reported quarter, the company posted on in-line earnings. The company surpassed earnings estimates in three out of the trailing four quarters, generating an average beat of 3.6%.

We believe that Broadridge’s strategic acquisitions, product launches, share repurchase program and dividend paying initiatives, will continue to boost the company’s top-line. We also believe that its close association with Accenture (ACN) will act as a tailwind.

Let’s see how things are shaping up prior to this announcement.

Expect What?

The Zacks Consensus Estimate for the quarter is pegged at 41 cents, reflecting a year-over-year increase of 13.9%.  Further, the earnings estimate has trended upward in the last 30 days. Further, analysts polled by Zacks expect revenues of $928 million, up roughly 3.7% from the year-ago quarter.

Aspects to Influence Q1 Results

Q4 Earnings Highlight

Broadridge reported modest fourth-quarter results. Year-over-year comparisons on both the counts were favorable driven by higher recurring revenues, internal growth, contribution from Net New Business, higher distribution revenues and acquisition-related synergies.

The company provided 2018 outlook. The company projects revenue growth in the range of 2-3%, while recurring revenue growth is expected in the range of 4-6%. The company anticipates recurring revenues from closed sales to be a key catalyst and range within $170-$210 million.

Notably, its shares have surged 30.9% in the year-to-date period, outperforming the industry’s meager gain of 3.9%.

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Acquisitions: Key Catalysts

The company has supplemented internal growth with strategic acquisitions. Broadridge acquired many companies like Message Automation Limited, DST Systems Inc.’s DST North American Customer Communications (NACC) business. The transaction expands digital communications offerings as well as print communications business. In our opinion, these buyouts have helped Broadridge to evolve as one of the leading financial and outsourcing services providers. We also remain encouraged by its acquisition spree, with the help of which the company is expanding its product portfolio and customer reach. These factors are likely to positively impact the to-be-reported quarter.

Strong Business Model & Share Repurchase: Other Positive Factors

The company generates recurring revenues and a good percentage of its business comes from recurring fee revenues, which include contributions from Net New Business and acquisitions related synergies. Revenue growth is an important metric for any company as it is a vital part of growth projections and instrumental in strategic decision-making. Further, revenue growth is essential for justifying the fixed and variable expenses incurred to operate a business. Broadridge’s diversified products and services coupled with strategic acquisitions have provided a boost to top-line growth.

In the last reported quarter, recurring fee revenues increased 24% during the quarter that included contribution from Net New Business, internal growth and acquisitions related synergies. Moreover, revenues from the Investor Communication Solutions segment (86% of total revenues) increased 45% from the year-ago quarter to $1.162 billion in the last reported quarter. The improvement was attributable to higher recurring revenues from net new business, internal growth and NACC acquisitions.

The Zacks Consensus Estimates for Investor Communication Solutions is pegged at $735 million, up 1.7% year over year.

Furthermore, Broadridge has a consistent record of returning value to shareholders in the form of dividend and share repurchases. In fiscal 2017, repurchased $342.8 million worth of its treasury stock and paid dividend of $152.2 million. These shareholder-friendly initiatives not only instill investors’ confidence but also positively impact earnings per share.

Why a Likely Positive Surprise?

Our proven model shows that Broadridge is likely to beat earnings because it has the right combination of two important ingredients.

Zacks ESP: Broadridge’s Earnings ESPis +4.03%. This is because the company’s Most Accurate estimate is 43 cents, while the Zacks Consensus Estimate is pegged lower at 41 cents. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Broadridge currently carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Broadridge’s Zacks Rank #2 and +4.03% ESP makes us reasonably optimistic of an earnings beat.

Other Stocks with Favorable Combination

Here are some companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

NVIDIA Corporation NVDA has an Earnings ESP of +1.60% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

DISH Network Corporation DISH has an Earnings ESP of +1.68% and a Zacks Rank #3.

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