Jefferies (JEF) AI Stock Analysis

• Market Cap: $13.75B
• Dividend Yield: 2.37%
• Average Volume (3M): 1.64M
• Price to Earnings (P/E): 22.9
• Beta (1Y): 1.50
• Revenue Growth: -9.97%
• EPS Growth: 25.28%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 1.01
• Shares Outstanding: 206,280,230
• 10 Day Avg. Volume: 2,343,987
• 30 Day Avg. Volume: 1,642,882
• PEG Ratio: 0.13
• Price to Book (P/B): 1.69
• Price to Sales (P/S): 1.63
• P/FCF Ratio: -37.36
• Enterprise Value/Market Cap: 2.38
• Enterprise Value/Revenue: 3.15
• Enterprise Value/Gross Profit: 6.03
• Enterprise Value/Ebitda: 8.86
• 1Y Price Target: $68.50
• Price Target Upside: 4.71% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 62 Neutral
• Price Target: $69.00 ▲(5.47% Upside)

Jefferies' overall stock score is driven by a mixed financial performance, with positive revenue growth but challenges in profitability and cash flow management. Technical analysis shows a positive trend, supporting the stock price. However, the high P/E ratio raises valuation concerns. The absence of earnings call and corporate events data limits the analysis to these factors.

Positive Factors

Strategic Alliance Expansion

The expansion of the strategic alliance with SMBC enhances Jefferies' global reach and capabilities, particularly in M&A and capital markets, strengthening its competitive position and offering potential for increased revenue streams.

Record Investment Banking Results

Record results in investment banking indicate strong market position and effective strategy execution, suggesting sustainable revenue growth and enhanced client relationships, which are crucial for long-term success.

New Product Integration

Integration into FactSet's Portware system enhances Jefferies' market presence and client service capabilities, potentially increasing trading volumes and client engagement, supporting long-term growth.

Negative Factors

High Leverage

High leverage poses risks in volatile markets, potentially straining cash flow and limiting financial flexibility, which could impact Jefferies' ability to invest in growth opportunities.

Negative Cash Flow

Negative cash flow indicates potential liquidity issues, limiting Jefferies' ability to fund operations and growth initiatives, which may affect long-term financial stability.

Low Net Profit Margin

A low net profit margin suggests challenges in converting revenue into profit, which could hinder Jefferies' ability to sustain profitability and compete effectively in the long run.

Jefferies Business Overview & Revenue Model

Company Description

Jefferies Financial Group Inc. (JEF) is a diversified financial services company headquartered in New York City, providing a range of investment banking, capital markets, asset management, and wealth management services. Established in 1962, the firm operates primarily in the United States, but also has a presence in various international markets. Jefferies serves a broad spectrum of clients, including corporations, institutions, and governments, offering expertise in equity and debt underwriting, mergers and acquisitions, and strategic advisory services.

How the Company Makes Money

Jefferies generates revenue through several key streams. The primary revenue sources are investment banking fees from advisory services, underwriting, and capital raising activities. The firm also earns commissions and trading revenues from its capital markets operations, which involve trading equities, fixed income, and derivatives. Additionally, Jefferies has a significant asset management division, which contributes to its earnings through management fees and performance fees on assets under management. The company's diverse client base and strong market presence allow it to capitalize on various financial transactions, while strategic partnerships and collaborations enhance its service offerings and market reach.

Jefferies Financial Statement Overview

Summary

Jefferies demonstrates strong profitability and operational efficiency, highlighted by high margins. However, challenges such as declining revenue growth and negative cash flow metrics indicate potential financial risks. The low reliance on debt is positive, but improving cash flow management is crucial for sustaining long-term growth.

Income Statement

Jefferies shows a solid gross profit margin of 59.40% and a net profit margin of 6.87% for TTM, indicating strong operational efficiency and profitability. The EBIT margin of 35.07% and EBITDA margin of 45.06% further emphasize effective cost management. However, the revenue growth rate shows a decline of 2.03% from the previous year, which could be a concern for future growth prospects.

Balance Sheet

The debt-to-equity ratio stands at a low 0.11, reflecting limited financial leverage and reduced default risk. The return on equity (ROE) for TTM is 6.93%, showing moderate profitability relative to equity. The equity ratio is 14.53%, suggesting that Jefferies is not overly reliant on equity financing. However, the relatively low equity ratio may indicate some risk in financial stability.

Cash Flow

Jefferies experienced a negative free cash flow in TTM, with a significant decline from the previous year. The operating cash flow to net income ratio is negative, indicating cash outflows exceeded income, which raises concerns about operational efficiency. On a positive note, the free cash flow to net income ratio is also negative, emphasizing the need for improved cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.41B	10.52B	7.23B	7.53B	9.46B	6.90B
Gross Profit	5.44B	6.22B	6.66B	6.51B	8.40B	6.13B
EBITDA	3.70B	4.68B	3.10B	2.42B	3.37B	2.17B
Net Income	646.93M	743.38M	277.69M	785.45M	1.67B	775.24M
Balance Sheet
Total Assets	67.28B	64.36B	57.91B	51.06B	56.11B	53.12B
Cash, Cash Equivalents and Short-Term Investments	11.26B	12.15B	8.53B	9.70B	10.76B	9.06B
Total Debt	34.22B	20.36B	16.09B	13.72B	11.42B	19.83B
Total Liabilities	56.90B	54.13B	48.10B	40.63B	45.38B	43.53B
Stockholders Equity	10.38B	10.16B	9.71B	10.36B	10.68B	9.53B
Cash Flow
Free Cash Flow	-2.78B	-459.84M	-1.93B	1.58B	1.42B	1.90B
Operating Cash Flow	-2.58B	-209.25M	-1.93B	1.80B	1.58B	2.08B
Investing Cash Flow	163.62M	210.31M	-12.20M	-60.54M	-409.87M	-186.19M
Financing Cash Flow	2.73B	3.35B	1.06B	-2.84B	994.29M	-723.52M

Jefferies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 65.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JEF, the sentiment is Neutral. The current price of 65.42 is below the 20-day moving average (MA) of 66.44, above the 50-day MA of 62.50, and above the 200-day MA of 59.98, indicating a neutral trend. The MACD of 0.90 indicates Positive momentum. The RSI at 43.43 is Neutral, neither overbought nor oversold. The STOCH value of 20.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JEF.

Jefferies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MC	80 Outperform	$5.83B	28.47	38.39%	3.58%	42.85%	1398.33%
EVR	79 Outperform	$13.15B	30.98	27.93%	0.97%	23.24%	55.76%
HLI	77 Outperform	$14.50B	34.76	18.75%	1.14%	23.39%	29.86%
SF	77 Outperform	$11.74B	22.22	12.86%	1.59%	8.76%	10.32%
PIPR	73 Outperform	$6.24B	29.76	14.75%	1.63%	10.46%	50.47%
JEF	62 Neutral	$13.75B	22.93	6.56%	2.37%	-9.97%	25.28%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Jefferies Corporate Events

Jefferies Reports Record Growth and Financial Health

Jefferies begins 2025 in its strongest position ever, driven by its talented team and unique culture, which has led to broad global growth and an enhanced market position. In 2024, the firm achieved $7 billion in net revenues and increased its quarterly dividend by 14.3%, reflecting significant progress in its M&A pipeline, IPO backlog, and trading volumes. The company has returned $6.4 billion to shareholders over seven years and had its credit ratings upgraded, indicating robust financial health and stakeholder alignment.