Jefferson Capital, Inc. (JCAP) AI Stock Analysis

• Market Cap: $1.24B
• Dividend Yield: 2.11%
• Average Volume (3M): 223.73K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.16
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 1,205
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 0.74
• Shares Outstanding: 58,290,474
• 10 Day Avg. Volume: 185,739
• 30 Day Avg. Volume: 223,726
• PEG Ratio: -1.96
• Price to Book (P/B): 2.82
• Price to Sales (P/S): 2.49
• P/FCF Ratio: 6.67
• Enterprise Value/Market Cap: 1.92
• Enterprise Value/Revenue: 4.11
• Enterprise Value/Gross Profit: 5.32
• Enterprise Value/Ebitda: 10.90
• 1Y Price Target: $27.33
• Price Target Upside: 29.53% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 2.82
• Revenue Forecast (FY): $677.50M

• Rating: 66 Neutral
• Price Target: $24.50 ▲(16.11% Upside)
• Action: Downgraded Date: 01/07/26
• Date: Action: Downgraded 01/07/26

The score is driven primarily by solid financial performance and a positive earnings call highlighting strong collections, revenue growth, and improved leverage/capital access. This is moderated by elevated leverage signals in the balance sheet analysis, weaker near-term technical trend indicators, and limited valuation visibility due to the missing P/E (despite a supportive dividend yield).

Positive Factors

Revenue & Margin Strength

Sustained 34% revenue growth with a 71% gross margin and ~24% net margin indicates the business model scales profitably. Durable margins support reinvestment in portfolio acquisitions and absorb cyclical credit losses, underpinning multi-quarter earnings resilience.

Free Cash Flow Generation

Robust FCF growth and FCF roughly matching net income show the company converts earnings into cash at scale. This durable cash generation supports debt repayment, repeat acquisitions of dislocated consumer credit assets, and sustained shareholder distributions.

Improved Capital Access & Lower Cost Financing

Greater, lower-cost committed capital and materially improved adjusted leverage provide durable funding capacity to scale portfolio deployments and pursue acquisitions like BlueStem, reducing refinance risk and enabling growth in an asset-driven business model.

Negative Factors

High Balance-Sheet Leverage

A D/E of 3.12 signals heavy reliance on debt financing, limiting financial flexibility. In a credit-services firm this raises refinancing and interest-rate risks, reduces shock absorption if recoveries worsen, and amplifies earnings volatility in downturns.

Rising Operating and Legal Costs

Sharp, persistent increases in operating and court costs erode margin sustainability and cash available for acquisitions or debt service. If legal and collection expense trends continue, they can structurally compress profitability despite revenue growth.

Weaker Cash Conversion & Credit Stress

Declining operating cash conversion alongside rising insolvencies signals structural pressure on collection efficiency and recoveries. That combination can strain liquidity and reduce the durability of cashflows that fund portfolios, dividends, and debt obligations.

Jefferson Capital, Inc. Business Overview & Revenue Model

Company Description

Jefferson Capital, Inc. provides debt recovery solutions and other related services in the United States, the United Kingdom, Canada, and Latin America. The company primarily purchases portfolios of previously charged-off consumer receivables at deep discounts to face value and manage them by working with individuals as they repay their obligations and work toward financial recovery. It offers consumer receivables, including credit card, secured and unsecured automotive, telecom and utilities, and other receivables. The company also provides debt servicing and other portfolio management services to credit originators for nonperforming loans. Jefferson Capital, Inc. was founded in 2002 and is headquartered in Sartell, Minnesota.

How the Company Makes Money

Jefferson Capital, Inc. generates revenue primarily through interest income from consumer loans and fees associated with debt recovery services. The company purchases consumer debt portfolios at a discount and then seeks to recover the outstanding amounts, earning a profit based on the difference between the purchase price and the amount collected. Additionally, JCAP earns revenue from servicing fees charged to clients for managing their debt portfolios and other financial services. Strategic partnerships with financial institutions and technology providers enhance their operational capabilities, driving growth in their revenue streams. Factors contributing to earnings include effective risk management practices, a robust technology platform for data analytics, and a strong regulatory compliance framework that supports their operations in the financial sector.

Jefferson Capital, Inc. Financial Statement Overview

Summary

Strong revenue growth and solid profitability metrics are partly offset by balance-sheet risk from higher leverage (debt-to-equity 3.12) and some pressure in cash conversion despite healthy free cash flow growth.

Income Statement

Jefferson Capital, Inc. has demonstrated strong revenue growth with a 34.12% increase in the latest year. The gross profit margin remains robust at 71.17%, although slightly lower than the previous year. Net profit margin decreased to 24.30%, indicating some pressure on profitability. EBIT and EBITDA margins are healthy, reflecting efficient operations.

Balance Sheet

The company's debt-to-equity ratio has increased to 3.12, indicating higher leverage, which could pose financial risk. Return on equity is strong at 27.53%, showcasing effective use of equity. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing.

Cash Flow

Free cash flow growth is impressive at 36.14%, and the free cash flow to net income ratio is nearly 1, indicating good cash generation relative to profits. However, the operating cash flow to net income ratio has decreased, suggesting potential challenges in converting income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2019	Dec 2018	Dec 2017
Income Statement
Total Revenue	577.39M	433.30M	323.07M	45.09M	31.21M	12.19M
Gross Profit	446.42M	308.40M	238.44M	41.10M	29.50M	11.92M
EBITDA	217.85M	158.06M	121.22M	59.17M	60.01M	16.15M
Net Income	140.08M	105.30M	111.52M	44.41M	54.37M	14.56M
Balance Sheet
Total Assets	1.80B	1.65B	1.12B	812.78M	590.41M	314.63M
Cash, Cash Equivalents and Short-Term Investments	42.27M	35.51M	14.37M	3.28M	8.71M	46.98M
Total Debt	1.19B	1.19B	770.93M	202.79M	24.61M	718.00K
Total Liabilities	1.37B	1.27B	811.78M	223.90M	42.54M	8.81M
Stockholders Equity	437.37M	382.53M	274.79M	588.87M	547.86M	305.82M
Cash Flow
Free Cash Flow	264.59M	162.00M	118.99M	-180.21M	-281.29M	-159.11M
Operating Cash Flow	271.00M	168.21M	120.22M	-13.63M	-6.30M	-3.57M
Investing Cash Flow	-420.04M	-542.37M	-403.41M	-321.31M	-241.75M	-115.55M
Financing Cash Flow	176.48M	388.82M	289.86M	-4.17M	34.97M	72.66M

Jefferson Capital, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YRD	73 Outperform	$325.75M	1.89	12.53%	10.37%	10.48%	-30.67%
FINV	71 Outperform	$1.47B	3.95	17.73%	5.20%	9.32%	29.40%
OMF	68 Neutral	$6.66B	8.66	23.76%	6.07%	9.51%	29.38%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
JCAP	66 Neutral	$1.24B	―	―	2.11%	―	―
PRAA	51 Neutral	$447.51M	―	-31.97%	―	13.89%	-899.50%