Jefferies (JEF) AI Stock Analysis

• Market Cap: $8.77B
• Dividend Yield: 3.29%
• Average Volume (3M): 2.65M
• Price to Earnings (P/E): 14.7
• Beta (1Y): 1.50
• Revenue Growth: 16.62%
• EPS Growth: 139.24%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 86
• Industry: Financial - Capital Markets
• EPS (TTM): 2.89
• Shares Outstanding: 206,255,980
• 10 Day Avg. Volume: 3,193,983
• 30 Day Avg. Volume: 2,649,127
• PEG Ratio: 0.11
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.16
• Price to Cash Flow (P/CF): 1.80
• P/FCF Ratio: 1.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $61.00
• Price Target Upside: 42.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Jefferies' overall score reflects strong profitability and reasonable valuation, but is hindered by negative cash flow trends and weak technical indicators suggesting bearish market sentiment. The absence of earnings call data and significant corporate events leaves the financial performance and technical analysis as the primary determinants of the score.

Positive Factors

Dividend Increase

Dividend increased from 35c to 40c, interpreted as confidence in earnings growth over the next several years.

M&A Activity

There remains strong dialogue around potential investment banking transactions and our high-quality backlog continues to build.

Valuation

JEF trades at a lower price-to-earnings ratio compared to its investment banking peers, suggesting that its current valuation might be attractive.

Negative Factors

Earnings Performance

JEF reported 1Q25 EPS of 57¢, which was below consensus estimates due to 15% lower revenue and a 7.1 percentage point lower pre-tax margin.

Investment Banking Conditions

Near-term uncertainty has impacted deal-making conditions.

Revenue Miss

JEF missed revenues across the board, with significant declines in IB, Trading, and Asset Management compared to consensus.

Jefferies Business Overview & Revenue Model

Company Description

Jefferies Financial Group Inc. engages in the investment banking and capital markets, and asset management businesses in the Americas, Europe, the Middle East, Africa, and Asia. The company operates in Investment Banking and Capital Markets, Asset Management, Merchant Banking, and Corporate segments. It provides investment banking, advisory services with respect to mergers or acquisitions, restructurings or recapitalizations and private capital advisory transactions; equity and debt underwriting; and corporate lending. In addition, the company offers financing, securities lending, and other prime brokerage services; equities research and finance; and wealth management services. Further, it provides clients with sales and trading of investment grade corporate bonds, U.S. and European government and agency securities, municipal bonds, mortgage-backed and asset-backed securities, leveraged loans, consumer loans, high yield and distressed securities, emerging markets debt, interest rate, and credit derivative products, as well as foreign exchange trade execution and securitization; and manages, invests in, and provides services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.

How the Company Makes Money

Jefferies makes money through multiple revenue streams, primarily from its investment banking and capital markets activities. The company generates fees from advising clients on mergers and acquisitions, underwriting equity and debt offerings, and providing restructuring services. In capital markets, Jefferies earns revenue from trading activities, including equities, fixed income, and commodities, as well as from market-making activities and securities lending. Additionally, the company derives income from its asset management operations, which involve managing investment portfolios for clients and earning management and performance fees. Key factors contributing to Jefferies' earnings include its strong client relationships, extensive market expertise, and strategic positioning in major financial markets.

Jefferies Financial Statement Overview

Summary

Jefferies exhibits strong revenue growth and improved leverage on its balance sheet, with a robust equity ratio and reduced financial risk. Profitability margins are solid, but there is room for improvement in net profit margins and cash flow stability.

Income Statement

Jefferies has demonstrated robust revenue growth over recent years with a 41.28% increase from 2023 to 2024. The gross profit margin stands at 60.41%, indicating strong cost management. However, the net profit margin is moderate at 6.36%, suggesting room for improvement in operational efficiencies. EBIT and EBITDA margins are at 6.77% and 44.05%, respectively, showing solid earnings before interest and taxes with significant depreciation and amortization expenses.

Balance Sheet

The balance sheet shows a healthy equity ratio of 15.78%, indicating a good level of shareholder equity relative to total assets. The debt-to-equity ratio has improved significantly to 0.04, reflecting reduced leverage and financial risk. Return on equity is at a moderate 6.59%, suggesting average profitability from shareholders' investments.

Cash Flow

Free cash flow has improved substantially, turning positive in 2024, indicating better cash generation capabilities. The operating cash flow to net income ratio is 0.48, which shows that a moderate proportion of net income is being converted into cash flows. While the free cash flow growth rate is positive, a cautious approach is warranted due to previous fluctuations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
10.52B	7.44B	7.15B	8.19B	6.01B
	Gross Profit
6.35B	4.03B	2.60B	3.78B	2.38B
	EBIT
712.35M	1.62B	1.44B	2.35B	1.14B
	EBITDA
4.68B	3.21B	1.63B	2.51B	2.17B
	Net Income Common Stockholders
669.27M	277.69M	785.45M	1.67B	775.24M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.15B	9.94B	9.70B	10.76B	9.06B
	Total Assets
64.36B	57.91B	51.06B	60.40B	53.12B
	Total Debt
443.16M	16.09B	11.20B	19.87B	19.83B
	Net Debt
-11.71B	7.57B	1.50B	9.11B	10.77B
	Total Liabilities
54.13B	48.10B	40.63B	49.67B	43.53B
	Stockholders Equity
10.16B	9.71B	10.36B	10.68B	9.53B
Cash Flow		Free Cash Flow
319.70M	-1.93B	1.58B	1.41B	1.90B
	Operating Cash Flow
319.70M	-1.93B	1.80B	1.57B	2.08B
	Investing Cash Flow
-950.12M	-12.20M	-60.54M	-400.59M	-186.19M
	Financing Cash Flow
3.35B	1.06B	-2.84B	994.29M	-723.52M

Jefferies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 42.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JEF, the sentiment is Negative. The current price of 42.76 is below the 20-day moving average (MA) of 52.68, below the 50-day MA of 60.67, and below the 200-day MA of 63.84, indicating a bearish trend. The MACD of -2.81 indicates Positive momentum. The RSI at 34.17 is Neutral, neither overbought nor oversold. The STOCH value of 16.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JEF.

Jefferies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVR	78 Outperform	$6.84B	19.25	23.03%	1.83%	22.67%	47.20%
HLI	77 Outperform	$10.53B	28.68	18.64%	1.52%	22.09%	28.37%
PJT	76 Outperform	$5.28B	27.64	62.26%	0.77%	29.48%	63.03%
PIPR	72 Outperform	$3.96B	21.83	15.66%	1.14%	12.29%	99.57%
SF	71 Outperform	$8.32B	12.82	13.32%	2.15%	15.33%	46.64%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%
JEF	60 Neutral	$8.77B	14.74	6.38%	3.29%	16.62%	139.24%

Jefferies Corporate Events

Jefferies Reports Record Growth and Financial Health

Jefferies begins 2025 in its strongest position ever, driven by its talented team and unique culture, which has led to broad global growth and an enhanced market position. In 2024, the firm achieved $7 billion in net revenues and increased its quarterly dividend by 14.3%, reflecting significant progress in its M&A pipeline, IPO backlog, and trading volumes. The company has returned $6.4 billion to shareholders over seven years and had its credit ratings upgraded, indicating robust financial health and stakeholder alignment.