Is Broadridge Financial Solutions Stock Underperforming the Dow?

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores?

Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth Score

Growth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum Score

Momentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM Score

If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Broadridge Financial Solutions (BR)

Based in Lake Success, NY, Broadridge is a global financial technology company that offers investor communications and technology-driven solutions to banks, broker-dealers, asset managers and corporate issuers. The company is a leading producer and distributor of a variety of documents, widely used in the financial industry including proxies, annual reports, prospectuses and trade confirmations.

BR is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. BR has a Growth Style Score of A, forecasting year-over-year earnings growth of 10.1% for the current fiscal year.

Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.12 to $8.51 per share. BR boasts an average earnings surprise of 5.3%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, BR should be on investors' short list.

Zacks Investment Research

PayPal Holdings, Inc. PYPL continues to exhibit strong fundamentals, driven by its constant efforts to expand its portfolio of solutions.

The company, which is one of the largest online payment solutions providers, has seen its shares rise 12.9% year to date, outpacing the Zacks Internet-Software industry’s 11% rise. Such an impressive gain naturally leads investors to wonder whether PayPal is still a compelling buy or if it is time to lock in profits.

The company has been benefiting from solid execution, payment platform enhancement and customer strategies. PayPal’s solid prospects in the cryptocurrency space are other positives.

Its comprehensive payment ecosystem, which connects merchants and customers seamlessly, is expected to continue bolstering its competitive position against its closest peer, Block SQ, as well as traditional fintech companies like MasterCard and Visa.

However, the PYPL stock has underperformed the broader technology sector and the S&P 500 index’s rallies of 14.5% and 15%, respectively. Market uncertainties, high inflation, unfavorable foreign exchange fluctuations and sluggish trends in consumer spending do not bode well for the company’s prospects.

Year-To-Date Price Performance