Jefferies (JEF) AI Stock Analysis

• Market Cap: $10.26B
• Dividend Yield: 2.89%
• Average Volume (3M): 1.31M
• Price to Earnings (P/E): 17.2
• Beta (1Y): 1.49
• Revenue Growth: 16.62%
• EPS Growth: 139.24%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Capital Markets
• EPS (TTM): 0.57
• Shares Outstanding: 206,255,980
• 10 Day Avg. Volume: 1,484,326
• 30 Day Avg. Volume: 1,305,788
• PEG Ratio: -5.88
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -5.85
• Enterprise Value/Market Cap: 2.22
• Enterprise Value/Revenue: 0.60
• Enterprise Value/Gross Profit: 3.75
• Enterprise Value/Ebitda: 1.30
• 1Y Price Target: $59.33
• Price Target Upside: 19.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 59 Neutral
• Price Target: ―

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

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

Investment Banking

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

Market Conditions

The capital markets have become increasingly more challenging due to the uncertainties that have arisen around U.S. policy and geopolitical events.

Revenue

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. (NYSE: JEF) is a diversified financial services company headquartered in New York City. It operates through two primary segments: Investment Banking and Capital Markets, and Merchant Banking. The firm provides a range of financial services including mergers and acquisitions advisory, underwriting, and trading of equities and fixed income products, as well as asset management services. Jefferies is known for its expertise in investment banking, particularly with middle-market companies, and has a robust presence in the global markets.

How the Company Makes Money

Jefferies primarily generates revenue through its investment banking and capital markets operations. In investment banking, it earns fees from advising clients on mergers and acquisitions, as well as from underwriting services for debt and equity offerings. The capital markets segment generates income from trading activities, including commissions and spreads on buying and selling securities in the equity and fixed income markets. Additionally, Jefferies' merchant banking activities involve investing in and managing a portfolio of companies and assets, which can provide returns through dividends, interest, and capital appreciation. Strategic partnerships and a diversified client base contribute significantly to Jefferies' earnings, allowing the company to leverage its market expertise and global reach.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
10.30B	10.52B	7.44B	7.15B	8.19B	6.01B
	Gross Profit
6.08B	6.22B	4.03B	2.60B	3.78B	2.38B
	EBIT
4.50B	4.71B	1.62B	1.44B	2.35B	1.14B
	EBITDA
4.65B	4.68B	3.21B	1.63B	2.51B	2.17B
	Net Income Common Stockholders
707.35M	743.38M	277.69M	785.45M	1.67B	775.24M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.18B	12.15B	9.94B	9.70B	10.76B	9.06B
	Total Assets
70.22B	64.36B	57.91B	51.06B	60.40B	53.12B
	Total Debt
23.59B	20.36B	16.09B	11.20B	19.87B	19.83B
	Net Debt
12.41B	8.21B	7.57B	1.50B	9.11B	10.77B
	Total Liabilities
59.95B	54.13B	48.10B	40.63B	49.67B	43.53B
	Stockholders Equity
10.20B	10.16B	9.71B	10.36B	10.68B	9.53B
Cash Flow		Free Cash Flow
-1.78B	-459.84M	-1.93B	1.58B	1.41B	1.90B
	Operating Cash Flow
-1.57B	-209.25M	-1.93B	1.80B	1.57B	2.08B
	Investing Cash Flow
-1.64B	210.31M	-12.20M	-60.54M	-400.59M	-186.19M
	Financing Cash Flow
5.06B	4.04B	1.06B	-2.84B	994.29M	-723.52M

Jefferies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 49.76
• 50DMA: Positive
• 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 Neutral. The current price of 49.76 is below the 20-day moving average (MA) of 49.87, above the 50-day MA of 49.68, and below the 200-day MA of 62.69, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 50.13 is Neutral, neither overbought nor oversold. The STOCH value of 19.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JEF.

Jefferies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLI	79 Outperform	$12.07B	29.69	19.93%	1.32%	24.88%	39.55%
EVR	77 Outperform	$8.74B	21.65	29.73%	1.42%	26.88%	68.65%
PJT	75 Outperform	$5.31B	26.74	96.33%	0.68%	16.04%	60.32%
PIPR	71 Outperform	$4.43B	21.79	17.59%	1.02%	12.29%	99.57%
SF	69 Neutral	$9.82B	18.22	11.48%	1.85%	12.85%	20.21%
Sector *	64 Neutral	$12.67B	9.74	7.58%	17015.08%	12.21%	-6.96%
JEF	59 Neutral	$10.26B	17.24	6.38%	2.89%	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.