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Jack Henry & Associates (JKHY)
NASDAQ:JKHY
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Jack Henry & Associates
(NASDAQ:JKHY)
74Outperform
Positive Factors
Market Position
Jack Henry continues to move up-market with both existing clients and competitive takeaways, with new client contracts and competitive takeaway deals.
Recurring Revenue
Over 90% of Jack Henry’s revenues are recurring, driven by long-term SaaS contracts and over 99% customer retention excluding M&A.
Revenue Growth
Core revenue acceleration coupled with outperformance on an optically conservative F4Q with easy comps is key to gain confidence in FY26 revenue growth durability.
Negative Factors
Revenue Guidance
F25 revenue guide lowered, driven by lower hardware revenue and delayed implementation of post-core products.
Revenue Miss
The revenue miss in the quarter was the result of a slowdown in hardware sales and non-recurring revenue from customer projects, which management suggested could be due to economic uncertainty.
Transaction Volume
Management cited customer purchase delays and potential declines in transaction volumes as reasons for the lowered revenue guidance, reflecting possible economic challenges.
Jack Henry & Associates (JKHY) vs. S&P 500 (SPY)
Market Cap
$12.54B
Dividend Yield1.23%
Average Volume (3M)624.10K
Price to Earnings (P/E)31.1
Beta (1Y)0.35
Revenue Growth5.60%
EPS GrowthN/A
CountryUS
Employees7,170
SectorTechnology
Sector Strength65
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.52
Shares Outstanding72,897,675
10 Day Avg. Volume619,965
30 Day Avg. Volume624,098
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.04
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit14.18
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$187.63Price Target Upside3.69% Upside
Rating ConsensusHold
Number of Analyst Covering10
Jack Henry & Associates Business Overview & Revenue Model
Company DescriptionJack Henry & Associates, Inc. (JKHY) is a leading provider of technology solutions and payment processing services primarily for financial institutions. The company operates across three primary sectors: core banking, payments, and information security. Its core products include banking platforms, payment processing systems, and risk management solutions, all designed to enhance operational efficiency and customer engagement for banks and credit unions.
How the Company Makes MoneyJack Henry & Associates generates revenue through a diversified model that includes software licensing, subscription services, and transaction-based fees. The company earns money by providing core banking software to financial institutions, which typically involves upfront licensing fees and ongoing maintenance or subscription fees. Additionally, JKHY offers payment processing services, generating revenue from transaction fees each time a payment is processed through their systems. The company also benefits from strategic partnerships with financial institutions and technology providers, enhancing its service offerings and expanding its market reach. These partnerships and a focus on innovation and security contribute significantly to its earnings.
Jack Henry & Associates Financial Statement Overview
Summary
Jack Henry & Associates exhibits strong financial health with robust revenue and profit growth, solid profitability margins, and effective cash flow management. The balance sheet is well-positioned with zero debt in the latest period, reducing leverage risk. However, liquidity needs to be monitored to support future growth.Income Statement
Jack Henry & Associates demonstrates strong revenue growth with an upward trajectory from $1.69 billion in 2020 to $2.27 billion in TTM (Trailing-Twelve-Months) 2024. Both the gross profit margin and net profit margin are robust, reflecting effective cost management and high profitability. The EBIT and EBITDA margins are consistently healthy, showing operational efficiency. However, the EBIT margin shows slight volatility over the years, which could indicate fluctuations in operating costs.85
Very Positive
Balance Sheet
The balance sheet of Jack Henry is solid with substantial stockholders' equity of $1.84 billion in 2024 and a strong decrease in total debt to $0 in the TTM of 2024, indicating excellent financial health and low leverage risk. The equity ratio is strong, reflecting a solid equity base relative to assets. However, cash and equivalents are low, potentially limiting liquidity flexibility.75
Positive
Cash Flow
The company shows strong free cash flow generation with consistent growth, highlighting good cash conversion capabilities. The operating cash flow to net income ratio is favorable, indicating efficient cash generation from operations. The free cash flow to net income ratio remains healthy, underscoring solid cash management. Despite this, there are fluctuations in investing and financing cash flows, which should be monitored.80
Positive
| Breakdown | ||||
| Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.22B | 2.08B | 1.94B | 1.76B | 1.70B | Gross Profit |
| 916.07M | 858.64M | 814.27M | 694.83M | 688.60M | EBIT |
| 489.39M | 480.69M | 297.03M | 223.12M | 380.63M | EBITDA |
| 714.31M | 680.37M | 652.27M | 398.72M | 459.97M | Net Income Common Stockholders |
| 381.82M | 366.65M | 362.92M | 311.47M | 296.67M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 38.28M | 12.24M | 48.79M | 50.99M | 213.34M | Total Assets |
| 2.92B | 2.77B | 2.46B | 2.34B | 2.43B | Total Debt |
| 209.60M | 275.00M | 115.07M | 100.19M | 323.00K | Net Debt |
| 171.32M | 262.76M | 66.28M | 49.20M | -213.02M | Total Liabilities |
| 1.08B | 399.73M | 1.07B | 1.02B | 878.79M | Stockholders Equity |
| 1.84B | 1.61B | 1.38B | 1.32B | 1.55B |
| Cash Flow | Free Cash Flow | |||
| 509.92M | 174.57M | 313.24M | 304.29M | 333.02M | Operating Cash Flow |
| 568.04M | 381.56M | 504.63M | 462.13M | 510.53M | Investing Cash Flow |
| -240.16M | -409.67M | -196.34M | -162.25M | -197.91M | Financing Cash Flow |
| -301.83M | -8.43M | -310.49M | -462.23M | -192.91M |
Jack Henry & Associates Technical Analysis
Positive
180.96
Price Trends
175.59
Positive
174.27
Positive
174.00
Positive
Market Momentum
0.55
Negative
62.77
Neutral
83.91
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JKHY, the sentiment is Positive. The current price of 180.96 is above the 20-day moving average (MA) of 173.19, above the 50-day MA of 175.59, and above the 200-day MA of 174.00, indicating a bullish trend. The MACD of 0.55 indicates Negative momentum. The RSI at 62.77 is Neutral, neither overbought nor oversold. The STOCH value of 83.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JKHY.
Jack Henry & Associates Risk Analysis
Jack Henry & Associates disclosed 25 risk factors in its most recent earnings report. Jack Henry & Associates reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Jack Henry & Associates Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $74.16B | 23.40 | 29.00% | 2.37% | 3.85% | -0.38% | |
78 Outperform | $27.44B | 34.89 | 33.92% | 1.45% | 5.73% | 13.40% | |
76 Outperform | $38.27B | 16.40 | 16.61% | 1.53% | 4.09% | 14.05% | |
74 Outperform | $12.54B | 31.06 | 22.49% | 1.23% | 5.60% | ― | |
73 Outperform | $102.22B | 32.81 | 11.88% | ― | 6.56% | 6.03% | |
60 Neutral | $10.96B | 10.28 | -6.73% | 2.97% | 7.74% | -12.45% | |
58 Neutral | $39.90B | 48.99 | 5.25% | 1.89% | -9.12% | ― |
* Technology Sector Average
Performance Comparison
JKHY
Jack Henry & Associates
180.96
15.38
9.29%
BR
Broadridge Financial Solutions
237.00
42.32
21.74%
CTSH
Cognizant
79.17
12.35
18.48%
FIS
Fidelity National Info
78.34
4.01
5.39%
FI
Fiserv
184.07
30.85
20.13%
INFY
Infosys
17.49
1.03
6.26%
Jack Henry & Associates Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q3-2025)
| % Change Since: 5.20%|
Next Earnings Date:Aug 26, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong performance in core areas such as cloud and processing revenue, core wins, and digital platform growth. However, macroeconomic concerns led to lowered revenue guidance and delays in nonrecurring projects, indicating caution in the market.Q3-2025 Updates
Positive Updates
Solid Non-GAAP Revenue and Margin Expansion
Non-GAAP revenue increased 7% and non-GAAP operating margin was 23%, with a 207 basis points margin expansion over last year.
Robust Core Wins
Secured 28 new core wins in fiscal year 2025, including 11 in Q3, with financial institutions totaling $30 billion in assets.
Growth in Cloud and Processing Revenue
76% of total revenue for the quarter came from processing and cloud, growing at 9.8% compared to 8.8% for Q3 fiscal year '24.
Strong Banno Digital Platform Growth
Banno Platform saw an 18% increase in registered users over the past 12 months, with over 13.7 million users.
Increased Deconversion Revenue Guidance
Full year deconversion revenue guidance raised to a range of $22 million to $28 million.
Negative Updates
Lowered Revenue Guidance Due to Macroeconomic Concerns
Full year non-GAAP revenue growth guidance lowered from 7% to 8% to 6% to 6.5% due to macroeconomic concerns and softening in nonstrategic revenue.
Softening of Nonstrategic Revenue
Decline in hardware purchases and consulting engagements, impacting non-GAAP revenue growth.
Delays in Nonrecurring Projects
Customers delaying the start of signed nonrecurring projects, including work orders and implementation of post-core conversion products.
Softening Debit Card Transactions
Some softening in debit card transactions, similar to trends experienced by card associations in the U.S. debit businesses.
Company Guidance
During the Jack Henry & Associates third quarter fiscal year 2025 earnings call, the company provided comprehensive guidance, highlighting key financial metrics and strategic initiatives. The non-GAAP revenue increased by 7%, with an operating margin of 23%, reflecting a 207-basis point expansion over the previous year. The company adjusted its full-year guidance for GAAP and non-GAAP revenue, margin expansion, and EPS, citing macroeconomic concerns and softening nonstrategic revenue such as hardware sales and consulting engagements. Despite these challenges, key revenue from processing and cloud services, which accounted for 76% of total revenue, grew by 9.8%. The company also forecasted a full-year deconversion revenue range of $22 million to $28 million. The call emphasized the strong sales pipeline and success in securing 28 new core wins, including financial institutions with $30 billion in assets. Additionally, the payments segment showed robust growth with significant client uptakes in Zelle, RTP, and FedNow platforms. Overall, Jack Henry remains optimistic about their strategic positioning and continued growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.