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Jacobs Solutions
(NYSE:J)
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Rating:60Neutral
Price Target:
$142.00
▲(5.53% Upside)
Action:Reiterated
Date:05/09/26
The score is held back primarily by softer recent financial quality (margin compression, sharply lower TTM free cash flow, and higher leverage) and a bearish technical setup (below major moving averages with negative MACD). These are partially offset by a strong earnings-call outlook with raised FY2026 guidance, record backlog, and accelerating AI/data-center demand, while valuation support is limited due to a negative P/E and only modest yield.
Positive Factors
Record backlog and upgraded guidance
A $27B record backlog and upgraded FY‑2026 outlook provide multi‑year revenue visibility and demonstrate durable demand. Backlog growth (22% YoY) and a book‑to‑bill >1 indicate committed work that supports revenue cadence, helping stabilize top‑line execution over the next 2–6 months.
Negative Factors
Elevated leverage after PA acquisition
The marked rise in leverage materially reduces financial flexibility and raises refinancing and interest‑cost sensitivity. Achieving management's deleveraging targets requires consistent cash conversion and disciplined capital allocation; failure would constrain M&A optionality and shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog and upgraded guidance
A $27B record backlog and upgraded FY‑2026 outlook provide multi‑year revenue visibility and demonstrate durable demand. Backlog growth (22% YoY) and a book‑to‑bill >1 indicate committed work that supports revenue cadence, helping stabilize top‑line execution over the next 2–6 months.
Read all positive factors
Jacobs Solutions Key Performance Indicators (KPIs)
Any
Revenue by Geography
Revenue split across regions reveals where Jacobs earns most of its sales and where growth or downside risks are concentrated. Large exposure to the U.S. points to sensitivity to federal, state and municipal infrastructure spending, while strength in international markets shows geographic diversification and different demand cycles.
Revenue split across regions reveals where Jacobs earns most of its sales and where growth or downside risks are concentrated. Large exposure to the U.S. points to sensitivity to federal, state and municipal infrastructure spending, while strength in international markets shows geographic diversification and different demand cycles.
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The Fly
The FlyJacobs Solutions (J) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.68B
Dividend Yield1.01%
Average Volume (3M)1.08M
Price to Earnings (P/E)41.4
Beta (1Y)0.89
Revenue Growth0.95%
EPS Growth-10.51%
CountryUS
Employees43,000
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)3.26
Shares Outstanding118,080,880
10 Day Avg. Volume745,701
30 Day Avg. Volume1,077,206
Financial Highlights & Ratios
PEG Ratio-0.99
Price to Book (P/B)4.88
Price to Sales (P/S)1.48
P/FCF Ratio29.23
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$159.75Price Target Upside18.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)7.25
Revenue Forecast (FY)$9.50B
Jacobs Solutions Business Overview & Revenue Model
Company Description
Jacobs Solutions Inc. engages in the infrastructure and advanced facilities, and consulting businesses in the United States, Europe, Canada, India, Asia, Australia, New Zealand, the Middle East, and Africa. The company provides consulting, plannin...
How the Company Makes Money
Jacobs primarily makes money by providing fee-based professional services and managing large, multi-year programs for clients, with revenue recognized as work is performed under contracts. Key revenue streams include (1) consulting and engineering...
Jacobs Solutions Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call conveyed a substantially positive operational and commercial momentum: strong top-line growth (gross revenue +27%, adjusted net revenue +9%), record backlog (+22% to $27B), double-digit EPS growth (+22%), rapid expansion in AI/data center demand (data center +100% YoY; AI ecosystem >40% growth), and an increased FY2026 outlook. Key strategic moves—completion of the PA Consulting acquisition, identified synergies (~$20M+) and an upgraded multi-year margin and free-cash-flow target—support upside. Near-term caveats include Q2 adjusted free cash outflow driven by transaction cash accounting, elevated net leverage (2.1x) until deleveraging occurs, a wider GAAP-to-adjusted EPS spread in Q2, and soft performance in parts of the environmental business. Overall, positive operating execution and bookings materially outweigh the near-term cash and integration headwinds.Positive Updates
Strong EPS and Margin Expansion
Adjusted EPS grew 22% year-over-year to $1.75 in Q2, supported by 70 basis points of year-over-year margin expansion. Adjusted EBITDA was $327 million, up more than 14%, with an adjusted EBITDA margin of 14.1%.
Negative Updates
Q2 Adjusted Free Cash Flow Outflow and Transaction Cash Impact
Q2 adjusted free cash outflow was $272 million (reversal of favorable Q1 timing item contributed). First half adjusted free cash flow was $93 million. Transaction accounting for the PA acquisition impacted reported operating cash flow by approximately $233 million in Q2 and is expected to impact Q3 by just over $100 million (including ~$235 million of compensation acceleration and ~ $101M–$105M of employee benefit trust payments).
Read all updates
Q2-2026 Updates
Positive
Negative
Strong EPS and Margin Expansion
Adjusted EPS grew 22% year-over-year to $1.75 in Q2, supported by 70 basis points of year-over-year margin expansion. Adjusted EBITDA was $327 million, up more than 14%, with an adjusted EBITDA margin of 14.1%.
Read all positive updates
Company Guidance
Jacobs raised its FY‑2026 outlook (inclusive of PA) to organic net revenue growth of 8.0–10.5%, an adjusted EBITDA margin of 14.6–14.9%, adjusted EPS of $7.10–$7.35 (implying ~18% YoY EPS growth at the midpoint), and an adjusted free cash flow margin of 7.0–8.5%; near‑term, management expects Q3 adjusted EBITDA margin ≈15% with ~7.5% YoY net revenue growth and an adjusted effective tax rate of 27–28% (Q3–Q4), and Q4 margin above 16% on double‑digit top‑line growth (including an extra week). They reaffirmed FY‑2029 targets of 6–8% organic CAGR (central view ≥7%), adjusted EBITDA margin 17%+, an 11%+ free cash flow margin (implying $1.2–$1.3B annual FCF by FY‑2029), at least $20M of annual cost synergies from PA, identified 75 bps of annual margin improvement for 2027–2029 (after ~200 bps in FY25–26), and a balance‑sheet path from ~2.1x net leverage now to <2.0x by year‑end and ~1.5x in FY2027.Jacobs Solutions Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
58
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.17B | 12.03B | 11.50B | 10.85B | 9.78B | 14.09B |
| Gross Profit | 3.08B | 2.98B | 2.83B | 2.71B | 2.58B | 3.04B |
| EBITDA | 893.63M | 926.84M | 1.26B | 996.31M | 878.74M | 1.02B |
| Net Income | 384.27M | 290.25M | 806.09M | 665.78M | 644.04M | 477.03M |
Balance Sheet | ||||||
| Total Assets | 11.94B | 11.25B | 11.76B | 14.62B | 14.66B | 14.63B |
| Cash, Cash Equivalents and Short-Term Investments | 1.37B | 1.24B | 1.89B | 770.85M | 1.14B | 1.01B |
| Total Debt | 4.56B | 2.71B | 2.75B | 3.47B | 4.17B | 3.82B |
| Total Liabilities | 8.66B | 6.59B | 6.37B | 7.38B | 7.92B | 8.00B |
| Stockholders Equity | 3.29B | 3.64B | 4.55B | 6.55B | 6.06B | 5.94B |
Cash Flow | ||||||
| Free Cash Flow | 484.09M | 607.47M | 933.56M | 837.28M | 347.09M | 633.46M |
| Operating Cash Flow | 572.32M | 686.70M | 1.05B | 974.76M | 474.71M | 726.28M |
| Investing Cash Flow | -87.11M | -75.29M | -127.19M | -145.66M | -538.42M | -1.38B |
| Financing Cash Flow | -235.44M | -525.22M | -751.64M | -1.09B | 320.23M | 798.98M |
Jacobs Solutions Technical Analysis
Positive
134.56
Price Trends
125.57
Positive
125.45
Positive
133.42
Positive
Market Momentum
2.32
Negative
65.48
Neutral
71.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For J, the sentiment is Positive. The current price of 134.56 is above the 20-day moving average (MA) of 131.29, above the 50-day MA of 125.57, and above the 200-day MA of 133.42, indicating a bullish trend. The MACD of 2.32 indicates Negative momentum. The RSI at 65.48 is Neutral, neither overbought nor oversold. The STOCH value of 71.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for J.
Jacobs Solutions Risk Analysis
Jacobs Solutions disclosed 62 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $98.74B | 75.49 | 14.86% | 0.07% | 26.30% | 34.94% | |
74 Outperform | $8.42B | 19.86 | 23.76% | 0.84% | -7.61% | 105.41% | |
66 Neutral | $17.14B | -59.22 | 9.64% | ― | 14.09% | -293.77% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $9.22B | 17.24 | 21.32% | 1.69% | -0.38% | 2.58% | |
63 Neutral | $25.64B | 41.43 | 14.53% | ― | 23.46% | 86.29% | |
60 Neutral | $15.68B | 41.39 | 10.82% | 1.01% | 0.95% | -10.51% |
* Industrials Sector Average
J
Jacobs Solutions
134.93
-3.55
-2.56%
ACM
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72.39
-38.08
-34.47%
MTZ
MasTec
263.10
85.17
47.87%
PWR
Quanta Services
667.36
274.08
69.69%
TTEK
Tetra Tech
33.16
-3.10
-8.55%
APG
APi Group
39.68
4.09
11.49%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.