Jacobs Solutions (J) AI Stock Analysis

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Jacobs Solutions

(NYSE:J)

68Neutral

Jacobs Solutions' stock score reflects strong revenue growth and operational efficiency, balanced by challenges in maintaining profitability. Technical analysis suggests a bearish trend, while the valuation indicates moderate pricing with a modest dividend yield. The earnings call presents a mixed outlook with both positive growth signals and profitability concerns.

Positive Factors

Backlog Strength

Jacobs has seen significant strength in the water and environmental end-markets with marquee project wins being a key component of backlog strength.

Free Cash Flow

Strong free cash flow generation is anticipated to continue with 100% conversion expected.

Market Position

Jacobs leverages its science-based expertise to be the leading program delivery manager for biotech, pharma, semiconductor, and data center buildout projects.

Negative Factors

Investment Uncertainty

The incoming Administration is likely to impact investment decisions, creating potential volatility and uncertainty for Jacobs Solutions Inc.

Legacy Project Risk

An automotive EV project was canceled, highlighting potential uncertainty in legacy projects due to shifting political priorities.

Jacobs Solutions (J) vs. S&P 500 (SPY)

Market Cap

$14.99B

Dividend Yield0.97%

Average Volume (3M)959.95K

Price to Earnings (P/E)25.2

Beta (1Y)0.65

Revenue Growth-13.76%

EPS Growth-13.39%

CountryUS

Employees45,000

SectorIndustrials

Sector Strength70

IndustryEngineering & Construction

Share Statistics

EPS (TTM)4.85

Shares Outstanding122,543,670

10 Day Avg. Volume853,049

30 Day Avg. Volume959,949

Financial Highlights & Ratios

PEG Ratio1.15

Price to Book (P/B)N/A

Price to Sales (P/S)1.45

Price to Cash Flow (P/CF)34.60

P/FCF Ratio38.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$145.71

Price Target Upside19.86% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Jacobs Solutions Business Overview & Revenue Model

Company DescriptionJacobs Engineering Group Inc. provides consulting, technical, scientific, and project delivery services for the government and private sectors in the United States, Europe, Canada, India, rest of Asia, Australia, New Zealand, South America, Mexico, the Middle East, and Africa. The company operates in two segments, Critical Mission Solutions and People & Places Solutions. The Critical Mission Solutions segment provides cybersecurity, data analytics, systems and software application integration and consulting, enterprise and mission IT, engineering and design, nuclear, enterprise level operations and maintenance, and other technical consulting solutions. The People & Places Solutions segment offers data analytics, artificial intelligence and automation, software development, digitally driven consulting, planning and architecture, program management, and other technical consulting solutions. The company is also involved in the management and execution of wind-tunnel design-build projects; and design-build for water and construction management. Jacobs Engineering Group Inc. was founded in 1947 and is headquartered in Dallas, Texas.

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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Sep 2024	Sep 2023	Sep 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
10.27B	11.50B	10.85B	9.78B	14.09B	13.57B
	Gross Profit
2.70B	2.83B	2.71B	2.58B	3.04B	2.59B
	EBIT
696.79M	692.44M	676.48M	539.88M	688.09M	535.97M
	EBITDA
1.12B	1.26B	996.31M	878.74M	1.02B	685.04M
	Net Income Common Stockholders
616.35M	806.09M	665.78M	644.04M	477.03M	385.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
938.84M	1.89B	926.58M	1.14B	1.01B	1.21B
	Total Assets
4.68B	11.76B	14.62B	14.66B	14.63B	12.35B
	Total Debt
79.91M	2.75B	3.57B	4.17B	3.82B	2.58B
	Net Debt
-858.93M	1.61B	2.64B	3.02B	2.81B	1.71B
	Total Liabilities
1.82B	6.37B	7.38B	7.92B	8.00B	6.50B
	Stockholders Equity
2.86B	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

Technical Analysis Sentiment

Neutral

Last Price121.57

Price Trends

50DMA

122.31

Positive

100DMA

129.15

Negative

200DMA

129.14

Negative

Market Momentum

MACD

-1.07

Negative

RSI

55.70

Neutral

STOCH

85.74

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For J, the sentiment is Neutral. The current price of 121.57 is above the 20-day moving average (MA) of 117.93, below the 50-day MA of 122.31, and below the 200-day MA of 129.14, indicating a neutral trend. The MACD of -1.07 indicates Negative momentum. The RSI at 55.70 is Neutral, neither overbought nor oversold. The STOCH value of 85.74 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACM	80 Outperform	$12.96B	27.78	26.35%	0.94%	8.89%	669.67%
FIX	79 Outperform	$12.02B	23.31	37.81%	0.38%	31.47%	64.96%
EME	78 Outperform	$18.65B	18.62	37.25%	0.25%	15.76%	61.64%
MTZ	75 Outperform	$9.71B	59.77	5.80%	―	2.56%	―
J	68 Neutral	$14.99B	25.20	10.92%	0.97%	-13.76%	-13.39%
PWR	65 Neutral	$42.60B	46.79	13.32%	0.13%	13.36%	20.00%
Sector *	63 Neutral	$4.28B	11.33	5.43%	214.88%	4.12%	-8.65%

* Industrials Sector Average

Performance Comparison

Jacobs Solutions

121.57

1.61

1.34%

ACM

Aecom Technology

97.34

4.22

4.53%

FIX

Comfort Systems

397.43

96.59

32.11%

EME

EMCOR Group

410.24

57.06

16.16%

MTZ

MasTec

125.11

36.07

40.51%

PWR

Quanta Services

287.34

26.03

9.96%

Jacobs Solutions Earnings Call Summary

Earnings Call Date: Feb 4, 2025 | % Change Since: -12.19% | Next Earnings Date: May 6, 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.

Jacobs Solutions Corporate Events

Private Placements and Financing

Jacobs Solutions Secures $200M and £410M Loan Agreement

Neutral

Mar 27, 2025

On March 27, 2025, Jacobs Solutions Inc. and Jacobs Engineering Group Inc. entered into a $200 million and £410 million term loan agreement with Bank of America, N.A. The loan, which has a two-year term, will be used to repay existing debt and for general corporate purposes. The agreement includes customary covenants and interest rates based on the borrower’s leverage ratio. The proceeds were used to repay the outstanding amounts under a previous loan agreement, resulting in the termination of related obligations and agreements.

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.