Jefferies (JEF) AI Stock Analysis

• Market Cap: $13.22B
• Dividend Yield: 2.42%
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 23.6
• Beta (1Y): 1.47
• Revenue Growth: 1.00%
• EPS Growth: 46.98%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 74
• Industry: Financial - Capital Markets
• EPS (TTM): 0.40
• Shares Outstanding: 206,280,230
• 10 Day Avg. Volume: 1,455,500
• 30 Day Avg. Volume: 1,366,772
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.48
• Enterprise Value/Revenue: 3.15
• Enterprise Value/Gross Profit: 6.03
• Enterprise Value/Ebitda: 8.86
• 1Y Price Target: $59.00
• Price Target Upside: -7.91% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: $63.00 ▼(-1.67% Downside)

Jefferies' stock score is supported by strong financial performance characterized by high profitability and operational efficiency, despite challenges in revenue growth and cash flow. The positive technical indicators suggest bullish momentum, though caution is warranted due to overbought signals. The valuation highlights a moderately high P/E ratio, balanced by a solid dividend yield.

Positive Factors

Backlog Improvement

JEF's backlog has improved year to date by 32%, which is higher than the average for investment banks and the industry.

Equities Trading

Near-record Equities trading increased by 24% year-over-year and strong Advisory grew by 61% year-over-year.

Market Position

Investment Banking Advisory activity was particularly strong and momentum and market position continue to strengthen.

Negative Factors

Earnings

JEF reported EPS of 57c vs. consensus of 94c (-39%).

Financial Performance

Weak Fixed Income, Currencies, and Commodities trading decreased by 37% year-over-year and Equity Capital Markets fell by 51% year-over-year.

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 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	0.00	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: Positive
• Last Price: 64.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JEF, the sentiment is Positive. The current price of 64.07 is above the 20-day moving average (MA) of 59.37, above the 50-day MA of 56.86, and above the 200-day MA of 61.06, indicating a bullish trend. The MACD of 1.65 indicates Negative momentum. The RSI at 69.83 is Neutral, neither overbought nor oversold. The STOCH value of 86.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JEF.

Jefferies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLI	78 Outperform	$14.10B	33.10	20.38%	1.15%	23.39%	29.86%
EVR	77 Outperform	$12.55B	28.95	29.16%	1.00%	23.24%	55.76%
PIPR	76 Outperform	$6.00B	28.22	17.91%	1.65%	10.46%	50.47%
SF	74 Outperform	$11.85B	22.26	11.11%	1.52%	8.76%	10.32%
Sector *	68 Neutral	$17.69B	11.82	10.30%	3.73%	9.66%	0.42%
JEF	68 Neutral	$13.22B	23.55	5.75%	2.42%	1.00%	46.98%
PJT	64 Neutral	$6.33B	30.57	106.47%	0.55%	18.40%	54.77%

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.