Jack Henry & Associates (JKHY) AI Stock Analysis

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Jack Henry & Associates

(NASDAQ:JKHY)

Rating:68Neutral

Price Target:

$192.00

▲(18.46% Upside)

Jack Henry & Associates' overall score is primarily supported by strong financial performance and strategic growth in core areas such as cloud and processing revenue. However, the stock faces challenges from moderate valuation metrics and mixed technical indicators. Despite some macroeconomic concerns, the company's strategic positioning and core wins remain strong positives.

Positive Factors

Customer Retention

Jack Henry's core customer retention rate is greater than 99%.

Earnings

FQ4 results beat Street mostly on strong deconversion revenue and core revenue beat slightly.

Financial Performance

Jack Henry has a debt-free balance sheet and generates strong free cash flow.

Negative Factors

Growth Outlook

Recent multiple compression is attributed to concerns over Jack Henry's long-term growth outlook as adjusted revenues rose 6.5% in fiscal 2025 and are expected to grow 5.8%-7.0% in fiscal 2026, marking a divergence from the company's historical long-term guidance of 7%-8%.

Industry Challenges

Industry is facing slower account growth due to emergence of neobank fintechs and purging of dormant accounts, which will affect F2026.

Revenue Growth

Concerns persist regarding medium-term revenue growth stability, especially given persistent pricing pressure and slowing account growth within the industry.

Jack Henry & Associates (JKHY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$11.81B

Dividend Yield1.39%

Average Volume (3M)717.08K

Price to Earnings (P/E)25.9

Beta (1Y)0.26

Revenue Growth7.21%

EPS Growth19.35%

CountryUS

Employees7,170

SectorTechnology

Sector Strength86

IndustryInformation Technology Services

Share Statistics

EPS (TTM)1.75

Shares Outstanding72,871,380

10 Day Avg. Volume1,008,587

30 Day Avg. Volume717,078

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.11

Enterprise Value/Revenue5.56

Enterprise Value/Gross Profit13.18

Enterprise Value/Ebitda16.35

Forecast

1Y Price Target

$186.86

Price Target Upside15.29% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Jack Henry & Associates Business Overview & Revenue Model

Company DescriptionJack Henry & Associates (JKHY) is a leading provider of technology solutions and payment processing services primarily for the financial services industry. The company caters to a diverse range of clients, including banks and credit unions, by offering an extensive suite of products and services. These include core processing systems, automation of business processes, and other financial technology solutions designed to enhance operational efficiency and customer experience.

How the Company Makes MoneyJack Henry & Associates generates revenue through a multi-faceted business model centered around its comprehensive suite of technology solutions and services for financial institutions. The company earns money primarily through the sale and ongoing maintenance of its core processing platforms, which are essential for the daily operations of banks and credit unions. Additionally, Jack Henry offers a range of complementary services, such as payment processing, risk management, and digital banking solutions, which provide recurring revenue streams through subscription fees and transaction-based charges. The company also engages in strategic partnerships and acquisitions to expand its product offerings and tap into new markets, further driving its revenue growth.

Jack Henry & Associates Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Breaks down revenue by business segment, offering insight into which areas are performing well and where there might be opportunities or challenges.

Chart InsightsJack Henry & Associates is experiencing robust growth in its Payments segment, driven by increased client uptake in platforms like Zelle and FedNow. Despite macroeconomic concerns lowering revenue guidance, the Core and Complementary segments are showing resilience with strategic wins and digital platform growth. The company's focus on processing and cloud services, which now constitute a significant portion of revenue, underscores its strategic pivot towards more stable, recurring revenue streams. However, caution is warranted due to softening nonstrategic revenue and delays in nonrecurring projects.

Data provided by:

Main Street Data

Jack Henry & Associates Earnings Call Summary

Earnings Call Date:Aug 19, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:Nov 11, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of strong financial performance, sales momentum, and successful technology initiatives. However, it also highlighted challenges from industry consolidation, potential impacts from bank mergers, and pricing pressures. The company remains confident in its strategic direction and long-term growth prospects.

Q4-2025 Updates

Positive Updates

Record Revenue and Operating Income

For fiscal year 2025, Jack Henry reported record non-GAAP revenue of $2.3 billion and non-GAAP operating income of $541.1 million. The non-GAAP revenue increased by 7.5% in Q4, with a strong margin expansion of 146 basis points over the previous year.

Strong Sales Momentum

The company signed 51 new core deals in fiscal 2025, including 31 banks and 20 credit unions. Additionally, 37 contracts were signed to move existing clients to the private cloud, marking 77% of their core clients now hosted in Jack Henry's private cloud.

Accolades and Industry Recognition

Jack Henry received recognition from U.S. News and World Report, Time Magazine, and Newsweek as a top workplace, reflecting its strong culture and commitment to employee satisfaction.

Successful Technology Migration

The company successfully migrated Fedwire Funds to the ISO 20022 standard, enhancing capabilities like fraud detection and data sharing. Five clients went live with the new wires component of their cloud-native platform.

Banno Platform Growth

The Banno digital platform signed 70 new retail contracts and 106 business contracts in fiscal 2025, with a 17% increase in registered users over the past year.

Negative Updates

Revenue Headwinds from Industry Consolidation

Jack Henry anticipates slight revenue headwinds in fiscal 2026 due to industry consolidation, renewal pricing pressure, and macroeconomic uncertainty.

Potential Impact from Large Bank Merger

A large bank merger involving a Jack Henry client could lead to contract changes in fiscal 2027, although there is currently no indication of an intent to terminate agreements.

Pricing Pressure in Renewals

The company experienced pricing pressure in renewals, particularly from competitors, which could affect short-term revenue growth despite long-term client retention.

Slower Account Growth

There is a noted slowdown in account growth, affected by factors such as competition from neobanks and changing customer deposit strategies.

Company Guidance

During the Jack Henry Fourth Quarter and Full Year 2025 Earnings Conference Call, the company reported a notable increase in financial performance metrics. For Q4, non-GAAP revenue rose by 7.5%, while the non-GAAP operating margin expanded by 146 basis points to 23.2%. The fiscal year ended with record non-GAAP revenue of $2.3 billion and non-GAAP operating income of $541.1 million. Looking ahead to fiscal 2026, Jack Henry anticipates slight revenue headwinds due to industry consolidation, renewal pricing pressures, and macroeconomic uncertainties but remains confident in achieving solid margin expansion and robust free cash flow. The company also highlighted a strong sales momentum with 51 new core deals in 2025, including 23 core wins in Q4 alone, and a significant increase in the total assets of new core clients. Additionally, the company is making progress with its SMB strategy, digital platform enhancements, and technology modernization efforts, with positive feedback on new solutions like Tap2Local and Jack Henry Rapid Transfers.

Jack Henry & Associates Financial Statement Overview

Summary

Jack Henry & Associates exhibits robust financial performance with consistent revenue and profitability growth, supported by strong cash flow management and a stable balance sheet. While the company is well-positioned, there is potential for improvement in return on equity and free cash flow growth.

Income Statement

Very Positive

Jack Henry & Associates demonstrated strong financial performance with a consistent upward trend in revenue over the years. The gross profit and net profit margins are healthy, supported by a robust EBIT and EBITDA margin. The company shows solid revenue growth, indicating effective market strategies and operational efficiency.

Balance Sheet

Positive

The balance sheet reveals a stable financial position with an improving debt-to-equity ratio, suggesting prudent financial management. The equity ratio is strong, highlighting a solid asset base. However, the return on equity shows potential for improvement to maximize shareholder value.

Cash Flow

Positive

The company maintains a stable cash flow with strong operating cash inflow and positive free cash flow, indicating effective cash management. The operating and free cash flow to net income ratios demonstrate efficient cash conversion. However, there is room for enhancing free cash flow growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.35B	2.34B	2.22B	2.08B	1.94B	1.76B
Gross Profit	994.16M	980.94M	916.07M	858.64M	814.27M	694.83M
EBITDA	801.23M	801.23M	714.31M	680.37M	652.27M	696.76M
Net Income	455.75M	455.75M	381.82M	366.65M	362.92M	311.47M
Balance Sheet
Total Assets	3.04B	3.04B	2.92B	2.77B	2.46B	2.34B
Cash, Cash Equivalents and Short-Term Investments	101.95M	101.95M	38.28M	12.24M	48.79M	50.99M
Total Debt	0.00	0.00	209.60M	325.27M	166.52M	161.02M
Total Liabilities	377.35M	377.35M	1.08B	1.17B	1.07B	1.02B
Stockholders Equity	2.13B	2.13B	1.84B	1.61B	1.38B	1.32B
Cash Flow
Free Cash Flow	454.01M	588.15M	335.62M	174.57M	313.24M	304.29M
Operating Cash Flow	641.50M	641.50M	568.04M	381.56M	504.63M	462.13M
Investing Cash Flow	-232.16M	-232.16M	-240.16M	-409.67M	-196.34M	-162.25M
Financing Cash Flow	-345.67M	-345.67M	-301.83M	-8.43M	-310.49M	-462.23M

Jack Henry & Associates Technical Analysis

Technical Analysis Sentiment

Negative

Last Price162.08

Price Trends

50DMA

172.92

Negative

100DMA

174.69

Negative

200DMA

174.37

Negative

Market Momentum

MACD

-3.20

Negative

RSI

41.24

Neutral

STOCH

58.24

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JKHY, the sentiment is Negative. The current price of 162.08 is below the 20-day moving average (MA) of 163.93, below the 50-day MA of 172.92, and below the 200-day MA of 174.37, indicating a bearish trend. The MACD of -3.20 indicates Negative momentum. The RSI at 41.24 is Neutral, neither overbought nor oversold. The STOCH value of 58.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JKHY.

Jack Henry & Associates Risk Analysis

Jack Henry & Associates disclosed 25 risk factors in its most recent earnings report. Jack Henry & Associates reported the most risks in the "Tech & Innovation" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Jack Henry & Associates Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BR	76 Outperform	$30.14B	36.17	34.81%	1.37%	5.88%	20.69%
INFY	75 Outperform	$72.48B	22.41	30.46%	2.95%	4.52%	-0.22%
CTSH	74 Outperform	$35.24B	14.70	16.69%	1.72%	6.34%	12.16%
JKHY	68 Neutral	$11.81B	25.91	22.94%	1.39%	7.21%	19.35%
FI	66 Neutral	$74.61B	22.94	12.66%	―	6.73%	3.93%
Sector *	61 Neutral	$35.62B	8.22	-10.94%	1.88%	8.86%	-10.36%
FIS	58 Neutral	$36.57B	266.12	1.01%	2.17%	3.64%	102.21%

* Technology Sector Average

Performance Comparison

JKHY

Jack Henry & Associates

162.08

-9.48

-5.53%

Broadridge Financial Solutions

257.29

48.95

23.50%

CTSH

Cognizant

71.68

-4.00

-5.29%

FIS

Fidelity National Info

70.00

-9.70

-12.17%

Fiserv

137.88

-33.95

-19.76%

INFY

Infosys

17.22

-5.29

-23.50%

Jack Henry & Associates Corporate Events

Executive/Board Changes

Jack Henry & Associates Announces Leadership Transition

Neutral

Jul 1, 2025

On June 30, 2025, David B. Foss stepped down from his role as Executive Chair of Jack Henry & Associates, marking a significant leadership transition for the company. Mr. Foss will continue to serve as a director and Chair of the Board of Directors, receiving compensation similar to other non-employee directors, with an additional annual retainer for his role as Board Chair.

The most recent analyst rating on (JKHY) stock is a Hold with a $180.00 price target. To see the full list of analyst forecasts on Jack Henry & Associates stock, see the JKHY Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy

Jack Henry Lowers Threshold for Special Meetings

Neutral

May 15, 2025

On May 9, 2025, Jack Henry & Associates, Inc. amended its bylaws to lower the threshold for stockholders to call a special meeting from two-thirds to twenty-five percent of voting stock. This change potentially enhances shareholder engagement and could influence corporate governance dynamics by making it easier for stockholders to initiate special meetings.

The most recent analyst rating on (JKHY) stock is a Hold with a $180.00 price target. To see the full list of analyst forecasts on Jack Henry & Associates stock, see the JKHY Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 26, 2025