Jefferies (JEF) AI Stock Analysis

• Market Cap: $10.16B
• Dividend Yield: 2.84%
• Average Volume (3M): 2.20M
• Price to Earnings (P/E): 17.1
• Beta (1Y): 1.52
• Revenue Growth: 16.62%
• EPS Growth: 139.24%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 88
• Industry: Financial - Capital Markets
• EPS (TTM): 2.89
• Shares Outstanding: 206,255,980
• 10 Day Avg. Volume: 1,295,809
• 30 Day Avg. Volume: 2,203,044
• PEG Ratio: 0.12
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 3.64
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 5.95
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $61.00
• Price Target Upside: 23.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Jefferies' stock score is primarily influenced by solid profitability and efficient cost management, as indicated by strong margins. However, the declining revenue growth and negative cash flow metrics pose significant risks. The technical analysis indicates bearish momentum, which could lead to further price declines. Valuation is reasonable, with a moderate P/E ratio and an attractive dividend yield. Overall, while profitability is strong, caution is advised due to financial risks and bearish technical indicators.

Positive Factors

Dividend Increase

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

M&A Opportunities

Jefferies starts the year with a renewed M&A pipeline that has a higher likelihood of successful execution.

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

Investment Banking Challenges

Macro, geopolitical, and policy uncertainty have hindered any significant growth in investment banking activities.

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 demonstrates strong profitability and operational efficiency, as evidenced by high margins. However, challenges include declining revenue growth and negative cash flow metrics, signaling potential financial risks. The company's low reliance on debt is a positive aspect, but improving cash flow management will be 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
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
6.22B	4.03B	2.60B	3.78B	2.38B
	EBIT
4.71B	1.62B	1.44B	2.35B	1.14B
	EBITDA
4.68B	3.21B	1.63B	2.51B	2.17B
	Net Income Common Stockholders
743.38M	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
20.36B	16.09B	11.20B	19.87B	19.83B
	Net Debt
8.21B	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
-459.84M	-1.93B	1.58B	1.41B	1.90B
	Operating Cash Flow
-209.25M	-1.93B	1.80B	1.57B	2.08B
	Investing Cash Flow
210.31M	-12.20M	-60.54M	-400.59M	-186.19M
	Financing Cash Flow
4.04B	1.06B	-2.84B	994.29M	-723.52M

Jefferies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 49.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 49.27 is above the 20-day moving average (MA) of 44.66, below the 50-day MA of 53.06, and below the 200-day MA of 63.46, indicating a neutral trend. The MACD of -1.60 indicates Negative momentum. The RSI at 52.43 is Neutral, neither overbought nor oversold. The STOCH value of 90.34 is Negative, 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
HLI	80 Outperform	$11.68B	31.81	18.64%	1.37%	22.09%	28.37%
EVR	78 Outperform	$8.36B	20.45	23.03%	1.50%	26.88%	68.65%
PJT	75 Outperform	$5.01B	25.27	62.26%	0.70%	16.04%	60.32%
PIPR	71 Outperform	$4.48B	24.61	15.66%	1.01%	12.29%	99.57%
SF	69 Neutral	$9.21B	17.06	13.32%	1.92%	12.85%	20.21%
Sector *	64 Neutral	$12.64B	9.74	8.05%	17044.60%	12.66%	-4.62%
JEF	59 Neutral	$10.16B	17.07	6.38%	2.84%	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.