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Jacobs Solutions Inc. (J)
:J
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Jacobs Solutions
(NYSE:J)62Neutral
Positive Factors
Competitive Position and Growth Outlook
There is a strong competitive position and outlook for solid growth led by Water and Environmental.
Project Wins and Backlog
Jacobs has seen significant strength in the water and environmental end-markets with marquee project wins being a key component of backlog strength.
Negative Factors
Political and Market Uncertainty
The incoming Administration is likely to impact investment decisions, creating potential volatility and uncertainty for Jacobs Solutions Inc.
Jacobs Solutions (J) vs. S&P 500 (SPY)
Market Cap
$15.04B
Dividend Yield0.95%
Average Volume (3M)920.64K
Price to Earnings (P/E)25.3
Beta (1Y)0.65
Revenue Growth-13.76%
EPS Growth-13.39%
CountryUS
Employees45,000
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)4.85
Shares Outstanding122,543,670
10 Day Avg. Volume1,019,108
30 Day Avg. Volume920,641
Financial Highlights & Ratios
PEG Ratio1.15
Price to Book (P/B)N/A
Price to Sales (P/S)1.49
Price to Cash Flow (P/CF)35.70
P/FCF Ratio39.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$156.00Price Target Upside27.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Jacobs Solutions Business Overview & Revenue Model
Company DescriptionJacobs Solutions (J) is a global professional services firm specializing in providing cutting-edge solutions across diverse sectors, including infrastructure, advanced facilities, environmental and nuclear, and cyber and intelligence. The company delivers a comprehensive range of services, encompassing engineering, design, consulting, and project management, tailored to meet the complex needs of its clients in both the public and private sectors.
How the Company Makes MoneyJacobs Solutions generates revenue through a diversified portfolio of services and solutions offered to its clients worldwide. The company's key revenue streams include engineering and construction services, consulting, and operations and maintenance services. By engaging in long-term contracts and partnerships with government agencies, corporations, and industrial clients, Jacobs Solutions ensures a steady flow of income. The company also leverages its expertise in sectors like aerospace, defense, and technology to secure large-scale projects that contribute significantly to its earnings. Additionally, strategic acquisitions and investments in technology and innovation enable Jacobs Solutions to expand its capabilities and access new markets, further enhancing its revenue potential.
Jacobs Solutions Financial Statement Overview
Summary
Jacobs Solutions demonstrates solid revenue growth and operational efficiency, reflected in steady EBIT and EBITDA margins. However, declining net profit margins and free cash flow growth suggest challenges in maintaining profitability. The balance sheet remains stable with manageable leverage, but there's a shift towards more liabilities. Overall, the company shows resilience in revenue generation and cash management, though it faces potential risks in profitability sustainability.Income Statement
Jacobs Solutions shows a solid financial performance with a stable gross profit margin of 22.4% TTM, although it has slightly decreased from previous annual reports. The net profit margin for TTM stands at 4.3%, showing a decline compared to 7.0% from the last annual report. Revenue growth TTM is impressive at 25.2%, indicating strong top-line growth. EBIT and EBITDA margins are healthy and stable, reflecting operational efficiency. However, the net income has decreased, signaling potential challenges in managing costs or other expenses.75
Positive
Balance Sheet
The balance sheet of Jacobs Solutions reflects moderate financial stability. The debt-to-equity ratio is 0.72, indicating a balanced approach to leveraging. The return on equity (ROE) for TTM is 14.7%, which is decent but slightly lower than previous periods, reflecting reduced profitability. The equity ratio stands at 36.2%, showing a solid level of equity financing, though it has declined from past figures, suggesting increased reliance on liabilities.70
Positive
Cash Flow
Cash flow analysis reveals a robust performance with a free cash flow growth rate of -32.6% TTM, which indicates a decline from the previous annual report. The operating cash flow to net income ratio is 1.21, and the free cash flow to net income ratio is 1.02 for TTM, showcasing efficient cash generation relative to net income. Despite the decrease in free cash flow, the company maintains strong cash flow metrics indicating effective cash management.80
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 14.39B | 11.50B | 16.35B | 14.92B | 14.09B | 13.57B | Gross Profit |
| 3.23B | 2.83B | 3.47B | 3.33B | 3.04B | 2.59B | EBIT |
| 988.00M | 692.44M | 1.08B | 917.85M | 688.09M | 535.97M | EBITDA |
| 1.12B | 1.26B | 1.39B | 1.28B | 1.02B | 685.04M | Net Income Common Stockholders |
| 616.33M | 806.09M | 665.78M | 644.04M | 477.03M | 385.88M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.89B | 1.89B | 926.58M | 1.14B | 1.01B | 1.21B | Total Assets |
| 11.76B | 11.76B | 14.62B | 14.66B | 14.63B | 12.35B | Total Debt |
| 2.75B | 2.75B | 3.57B | 4.17B | 3.82B | 2.58B | Net Debt |
| 1.61B | 1.61B | 2.64B | 3.02B | 2.81B | 1.71B | Total Liabilities |
| 6.37B | 6.37B | 7.38B | 7.92B | 8.00B | 6.50B | Stockholders Equity |
| 4.55B | 4.55B | 6.55B | 6.06B | 5.94B | 5.82B |
| Cash Flow | Free Cash Flow | ||||
| 629.63M | 933.56M | 837.28M | 347.09M | 633.46M | 688.58M | Operating Cash Flow |
| 743.77M | 1.05B | 974.76M | 474.71M | 726.28M | 806.85M | Investing Cash Flow |
| -119.11M | -127.19M | -145.66M | -538.42M | -1.38B | -429.09M | Financing Cash Flow |
| -430.78M | -751.64M | -1.09B | 320.23M | 798.98M | -208.31M |
Jacobs Solutions Technical Analysis
Negative
122.72
Price Trends
133.40
Negative
136.49
Negative
128.23
Negative
Market Momentum
-2.72
Positive
26.77
Positive
18.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For J, the sentiment is Negative. The current price of 122.72 is below the 20-day moving average (MA) of 129.57, below the 50-day MA of 133.40, and below the 200-day MA of 128.23, indicating a bearish trend. The MACD of -2.72 indicates Positive momentum. The RSI at 26.77 is Positive, neither overbought nor oversold. The STOCH value of 18.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for J.
Jacobs Solutions Risk Analysis
Jacobs Solutions disclosed 61 risk factors in its most recent earnings report. Jacobs Solutions reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Jacobs Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $12.48B | 26.76 | 21.55% | 0.95% | 8.89% | 669.67% | |
76 Outperform | C$13.46B | 37.23 | 12.27% | 0.73% | 15.75% | 7.64% | |
73 Outperform | $6.40B | 17.31 | 25.81% | 1.24% | 11.30% | ― | |
71 Outperform | $7.82B | 30.47 | 15.32% | 0.82% | 11.02% | 11.33% | |
66 Neutral | $6.06B | 2.94 | 54.32% | ― | 5.43% | 2094.12% | |
62 Neutral | $15.04B | 25.28 | 14.66% | 0.95% | -13.76% | -13.39% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
J
Jacobs Solutions
122.72
0.94
0.77%
ACM
Aecom Technology
94.08
6.35
7.24%
FLR
Fluor
35.93
-0.92
-2.50%
KBR
KBR
49.34
-11.78
-19.27%
TTEK
Tetra Tech
29.13
-7.03
-19.44%
TSE:STN
Stantec
118.00
7.79
7.07%
Jacobs Solutions Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -11.36% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue and backlog growth, improved EBITDA performance, and substantial share repurchase plans. However, these positives were countered by declines in adjusted EPS, a GAAP EPS loss, and softness in Advanced Manufacturing. The sentiment of the call can be considered balanced overall.Highlights
Revenue and Backlog Growth
Total gross revenue increased over 4% in Q1 with adjusted net revenue rising over 5%. Consolidated backlog increased by 19% year-over-year, indicating strong demand and sales performance.
Adjusted EBITDA Performance
Adjusted EBITDA for Q1 was $282 million, a 24% year-on-year increase, with a strong adjusted EBITDA margin of 13.5%, which is an increase of approximately 200 basis points year-over-year.
Infrastructure and Advanced Facilities Growth
Significant revenue growth was reported in the Infrastructure and Advanced Facilities segment, with notable achievements in water treatment and public transit projects.
PA Consulting Margin Improvement
PA Consulting's operating profit increased by 22.6% year-over-year, demonstrating strong execution despite flat revenue performance.
Share Repurchase Authorization
Board of Directors approved a new $1.5 billion share repurchase authorization, the largest in company history, signaling strong capital return commitments.
Lowlights
Decline in Adjusted EPS
Adjusted EPS for Q1 was $1.33, marking an 8% decrease compared to the previous year, primarily due to an unfavorable tax comparison.
GAAP EPS Loss
GAAP EPS was negative $0.10, impacted by a $145 million unrealized pretax loss associated with the mark-to-market adjustment of the company's investment in Amentum.
Softness in Advanced Manufacturing
Advanced Manufacturing experienced softness, with expectations for growth to improve only in the second half of the year.
Company Guidance
During Jacobs Solutions' Fiscal First Quarter 2025 Earnings Conference Call, the company reported a 4% increase in total gross revenue and a 5% rise in adjusted net revenue compared to the previous year. Adjusted EBITDA for the quarter was $282 million, marking a 24% year-over-year increase, while the adjusted EBITDA margin improved by approximately 200 basis points to 13.5%. Although GAAP EPS was negative $0.10 due to a significant mark-to-market loss, adjusted EPS was $1.33, an 8% decrease primarily due to an unfavorable tax comparison. The consolidated backlog grew by 19% year-over-year, with a trailing 12-month book-to-bill ratio of 1.3x. Jacobs reiterated its fiscal 2025 outlook, projecting mid- to high single-digit growth in adjusted net revenue, an adjusted EBITDA margin of 13.8% to 14%, and adjusted EPS guidance increased from $5.80 to $6.20 to a new range of $5.85 to $6.20, indicating strong business prospects.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.