Jefferies (JEF) AI Stock Analysis

• Market Cap: $12.88B
• Dividend Yield: 2.53%
• Average Volume (3M): 1.82M
• Price to Earnings (P/E): 21.5
• Beta (1Y): 1.49
• Revenue Growth: -9.97%
• EPS Growth: 25.28%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 1.01
• Shares Outstanding: 206,280,230
• 10 Day Avg. Volume: 2,306,072
• 30 Day Avg. Volume: 1,822,886
• PEG Ratio: 0.13
• Price to Book (P/B): 1.69
• Price to Sales (P/S): 1.63
• P/FCF Ratio: -37.36
• Enterprise Value/Market Cap: 2.54
• Enterprise Value/Revenue: 3.15
• Enterprise Value/Gross Profit: 6.03
• Enterprise Value/Ebitda: 8.86
• 1Y Price Target: $71.50
• Price Target Upside: 16.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 54 Neutral
• Price Target: $62.00 ▲(1.34% Upside)

Jefferies' overall stock score is primarily impacted by its mixed financial performance and bearish technical indicators. While there is some revenue growth and a healthy gross profit margin, high leverage and negative cash flows pose significant risks. The technical analysis indicates a bearish trend, and the valuation suggests the stock may be overvalued, limiting potential upside.

Positive Factors

Gross Profit Margin

A strong gross profit margin indicates efficient cost management, allowing Jefferies to maintain profitability despite revenue fluctuations.

Asset Management Division

The asset management division contributes to earnings through management and performance fees, providing a stable revenue stream and diversification.

Diverse Revenue Streams

Jefferies' diverse revenue streams from various financial services reduce reliance on any single market segment, enhancing resilience.

Negative Factors

High Leverage

High leverage increases financial risk, especially in volatile markets, potentially impacting Jefferies' ability to invest in growth opportunities.

Negative Cash Flows

Negative cash flows indicate potential liquidity issues, which can constrain Jefferies' operational flexibility and investment capacity.

Operational Profitability Challenges

Negative EBIT margins reflect operational inefficiencies, which can hinder Jefferies' ability to generate sustainable profits over the long term.

Jefferies Business Overview & Revenue Model

Company Description

Jefferies Financial Group Inc. (JEF) is a diversified financial services company headquartered in New York City, providing a range of investment banking, capital markets, asset management, and wealth management services. Established in 1962, the firm operates primarily in the United States, but also has a presence in various international markets. Jefferies serves a broad spectrum of clients, including corporations, institutions, and governments, offering expertise in equity and debt underwriting, mergers and acquisitions, and strategic advisory services.

How the Company Makes Money

Jefferies generates revenue through several key streams. The primary revenue sources are investment banking fees from advisory services, underwriting, and capital raising activities. The firm also earns commissions and trading revenues from its capital markets operations, which involve trading equities, fixed income, and derivatives. Additionally, Jefferies has a significant asset management division, which contributes to its earnings through management fees and performance fees on assets under management. The company's diverse client base and strong market presence allow it to capitalize on various financial transactions, while strategic partnerships and collaborations enhance its service offerings and market reach.

Jefferies Financial Statement Overview

Summary

Jefferies demonstrates strong profitability and operational efficiency, highlighted by high margins. However, challenges such as declining revenue growth and negative cash flow metrics indicate potential financial risks. The low reliance on debt is positive, but improving cash flow management is crucial for sustaining long-term growth.

Income Statement

Jefferies shows a solid gross profit margin of 59.40% and a net profit margin of 6.87% for TTM, indicating strong operational efficiency and profitability. The EBIT margin of 35.07% and EBITDA margin of 45.06% further emphasize effective cost management. However, the revenue growth rate shows a decline of 2.03% from the previous year, which could be a concern for future growth prospects.

Balance Sheet

The debt-to-equity ratio stands at a low 0.11, reflecting limited financial leverage and reduced default risk. The return on equity (ROE) for TTM is 6.93%, showing moderate profitability relative to equity. The equity ratio is 14.53%, suggesting that Jefferies is not overly reliant on equity financing. However, the relatively low equity ratio may indicate some risk in financial stability.

Cash Flow

Jefferies experienced a negative free cash flow in TTM, with a significant decline from the previous year. The operating cash flow to net income ratio is negative, indicating cash outflows exceeded income, which raises concerns about operational efficiency. On a positive note, the free cash flow to net income ratio is also negative, emphasizing the need for improved cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.41B	10.52B	7.23B	7.53B	9.46B	6.90B
Gross Profit	5.44B	6.22B	6.66B	6.51B	8.40B	6.13B
EBITDA	3.70B	4.68B	3.10B	2.42B	3.37B	2.17B
Net Income	646.93M	743.38M	277.69M	785.45M	1.67B	775.24M
Balance Sheet
Total Assets	67.28B	64.36B	57.91B	51.06B	56.11B	53.12B
Cash, Cash Equivalents and Short-Term Investments	11.26B	12.15B	8.53B	9.70B	10.76B	9.06B
Total Debt	34.22B	20.36B	16.09B	13.72B	11.42B	19.83B
Total Liabilities	56.90B	54.13B	48.10B	40.63B	45.38B	43.53B
Stockholders Equity	10.38B	10.16B	9.71B	10.36B	10.68B	9.53B
Cash Flow
Free Cash Flow	-2.78B	-459.84M	-1.93B	1.58B	1.42B	1.90B
Operating Cash Flow	-2.58B	-209.25M	-1.93B	1.80B	1.58B	2.08B
Investing Cash Flow	163.62M	210.31M	-12.20M	-60.54M	-409.87M	-186.19M
Financing Cash Flow	2.73B	3.35B	1.06B	-2.84B	994.29M	-723.52M

Jefferies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 61.18
• 50DMA: Negative
• 100DMA: Positive
• 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 61.18 is below the 20-day moving average (MA) of 65.88, below the 50-day MA of 62.86, and above the 200-day MA of 59.62, indicating a bearish trend. The MACD of -0.50 indicates Positive momentum. The RSI at 31.14 is Neutral, neither overbought nor oversold. The STOCH value of 2.53 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	79 Outperform	$12.57B	29.93	29.16%	1.01%	23.24%	55.76%
HLI	77 Outperform	$14.17B	33.96	20.38%	1.19%	23.39%	29.86%
PIPR	73 Outperform	$6.09B	28.83	17.91%	1.64%	10.46%	50.47%
MC	70 Outperform	$5.45B	26.90	45.36%	3.82%	42.85%	1398.33%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SF	64 Neutral	$11.57B	21.55	11.11%	1.59%	8.76%	10.32%
JEF	54 Neutral	$12.88B	21.47	6.56%	2.53%	-9.97%	25.28%

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.