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Jack Henry & Associates (JKHY)
NASDAQ:JKHY

Jack Henry & Associates (JKHY) AI Stock Analysis

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Jack Henry & Associates

(NASDAQ:JKHY)

Rating:74Outperform
Price Target:
$201.00
▲(8.89%Upside)
Jack Henry & Associates shows solid financial performance and strong operational metrics, particularly in cloud and processing revenues. However, the stock's valuation is high, and macroeconomic challenges have prompted a cautious outlook. Positive technical indicators suggest bullish momentum, but potential overvaluation and market caution are significant risks.
Positive Factors
Earnings
Jack Henry & Associates reported better-than-expected margins and earnings per share, which is a positive indicator for the company's financial health.
Market Position
Jack Henry continues to move up-market with both existing clients and competitive takeaways, with new client contracts and competitive takeaway deals.
Revenue Growth
The mix and growth of key revenue, which represents 78% of non-GAAP revenue, is growing by 10% year over year.
Negative Factors
Economic Uncertainty
Management cited customer purchase delays and potential declines in transaction volumes as reasons for the lowered revenue guidance, reflecting possible economic challenges.
Hardware Sales
The revenue miss was primarily attributable to lower-than-expected hardware sales, which fell $4 million year-over-year.
Revenue Guidance
Revenue guidance was lowered, confirming investor fears of a difficult setup for accelerating growth.

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

Jack Henry & Associates Business Overview & Revenue Model

Company DescriptionJack Henry & Associates, Inc. provides technology solutions and payment processing services primarily for financial services organizations in the United States. It operates through four segments: Core, Payments, Complementary, and Corporate and Other. The company offers information and transaction processing solutions for banks ranging from community to multi-billion-dollar asset institutions under the Jack Henry Banking brand; core data processing solutions for various credit unions under the Symitar brand; and specialized financial performance, imaging and payments processing, information security and risk management, retail delivery, and online and mobile solutions to financial institutions and corporate entities under the ProfitStars brand. It also provides a suite of integrated applications required to process deposit, loan, and general ledger transactions, as well as to maintain centralized customer/member information; and complementary products and services that enable core bank and credit union clients to respond to evolving customer/member demands. The company's Jack Henry Banking business brand offers SilverLake, a robust primarily designed for commercial-focused banks; CIF 20/20, a parameter-driven, easy-to-use system for banks; and Core Director, a cost-efficient system with point-and-click operation. Its Symitar business brand provides Episys, a robust designed for credit unions. In addition, the company offers digital products and services and electronic payment solutions; purchases and resells hardware systems, including servers, workstations, scanners, and other devices; and provides implementation, training, and support services. Jack Henry & Associates, Inc. was founded in 1976 and is headquartered in Monett, Missouri.
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 Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q3-2025)
|
% Change Since: 7.31%|
Next Earnings Date:Aug 26, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong performance in core areas such as cloud and processing revenue, core wins, and digital platform growth. However, macroeconomic concerns led to lowered revenue guidance and delays in nonrecurring projects, indicating caution in the market.
Q3-2025 Updates
Positive Updates
Solid Non-GAAP Revenue and Margin Expansion
Non-GAAP revenue increased 7% and non-GAAP operating margin was 23%, with a 207 basis points margin expansion over last year.
Robust Core Wins
Secured 28 new core wins in fiscal year 2025, including 11 in Q3, with financial institutions totaling $30 billion in assets.
Growth in Cloud and Processing Revenue
76% of total revenue for the quarter came from processing and cloud, growing at 9.8% compared to 8.8% for Q3 fiscal year '24.
Strong Banno Digital Platform Growth
Banno Platform saw an 18% increase in registered users over the past 12 months, with over 13.7 million users.
Increased Deconversion Revenue Guidance
Full year deconversion revenue guidance raised to a range of $22 million to $28 million.
Negative Updates
Lowered Revenue Guidance Due to Macroeconomic Concerns
Full year non-GAAP revenue growth guidance lowered from 7% to 8% to 6% to 6.5% due to macroeconomic concerns and softening in nonstrategic revenue.
Softening of Nonstrategic Revenue
Decline in hardware purchases and consulting engagements, impacting non-GAAP revenue growth.
Delays in Nonrecurring Projects
Customers delaying the start of signed nonrecurring projects, including work orders and implementation of post-core conversion products.
Softening Debit Card Transactions
Some softening in debit card transactions, similar to trends experienced by card associations in the U.S. debit businesses.
Company Guidance
During the Jack Henry & Associates third quarter fiscal year 2025 earnings call, the company provided comprehensive guidance, highlighting key financial metrics and strategic initiatives. The non-GAAP revenue increased by 7%, with an operating margin of 23%, reflecting a 207-basis point expansion over the previous year. The company adjusted its full-year guidance for GAAP and non-GAAP revenue, margin expansion, and EPS, citing macroeconomic concerns and softening nonstrategic revenue such as hardware sales and consulting engagements. Despite these challenges, key revenue from processing and cloud services, which accounted for 76% of total revenue, grew by 9.8%. The company also forecasted a full-year deconversion revenue range of $22 million to $28 million. The call emphasized the strong sales pipeline and success in securing 28 new core wins, including financial institutions with $30 billion in assets. Additionally, the payments segment showed robust growth with significant client uptakes in Zelle, RTP, and FedNow platforms. Overall, Jack Henry remains optimistic about their strategic positioning and continued growth.

Jack Henry & Associates Financial Statement Overview

Summary
Jack Henry & Associates exhibits a robust financial profile with consistent growth in revenue and profitability, strong cash flow management, and a stable balance sheet. The company demonstrates a healthy gross and net profit margin, supported by a strong EBIT and EBITDA margin. However, there is room for enhancing return on equity and free cash flow growth.
Income Statement
85
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
78
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
80
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
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
2.32B2.22B2.08B1.94B1.76B1.70B
Gross Profit
975.69M916.07M858.64M814.27M694.83M688.60M
EBIT
538.64M489.39M480.69M297.03M223.12M380.63M
EBITDA
772.65M714.31M680.37M652.27M398.72M459.97M
Net Income Common Stockholders
429.22M381.82M366.65M362.92M311.47M296.67M
Balance SheetCash, Cash Equivalents and Short-Term Investments
26.71M38.28M12.24M48.79M50.99M213.34M
Total Assets
2.75B2.92B2.77B2.46B2.34B2.43B
Total Debt
255.00M209.60M275.00M115.07M100.19M323.00K
Net Debt
228.29M171.32M262.76M66.28M49.20M-213.02M
Total Liabilities
1.03B1.08B399.73M1.07B1.02B878.79M
Stockholders Equity
1.72B1.84B1.61B1.38B1.32B1.55B
Cash FlowFree Cash Flow
302.71M335.62M174.57M313.24M304.29M333.02M
Operating Cash Flow
546.19M568.04M381.56M504.63M462.13M510.53M
Investing Cash Flow
-251.98M-240.16M-409.67M-196.34M-162.25M-197.91M
Financing Cash Flow
-281.60M-301.83M-8.43M-310.49M-462.23M-192.91M

Jack Henry & Associates Technical Analysis

Technical Analysis Sentiment
Positive
Last Price184.59
Price Trends
50DMA
176.25
Positive
100DMA
174.89
Positive
200DMA
174.82
Positive
Market Momentum
MACD
2.58
Negative
RSI
61.88
Neutral
STOCH
63.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JKHY, the sentiment is Positive. The current price of 184.59 is above the 20-day moving average (MA) of 178.71, above the 50-day MA of 176.25, and above the 200-day MA of 174.82, indicating a bullish trend. The MACD of 2.58 indicates Negative momentum. The RSI at 61.88 is Neutral, neither overbought nor oversold. The STOCH value of 63.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
81
Outperform
$76.37B24.2429.00%2.29%3.85%-0.38%
BRBR
78
Outperform
$28.19B36.0733.92%1.45%5.73%13.40%
76
Outperform
$39.75B16.9816.61%1.53%4.09%14.05%
74
Outperform
$13.44B31.4222.49%1.23%6.04%13.36%
FIFIS
71
Outperform
$42.01B50.025.25%1.89%-9.12%
FIFI
68
Neutral
$88.34B28.1811.88%6.56%6.03%
61
Neutral
$11.29B10.17-6.88%2.97%7.41%-8.93%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JKHY
Jack Henry & Associates
184.59
24.60
15.38%
BR
Broadridge Financial Solutions
239.99
48.93
25.61%
CTSH
Cognizant
80.64
15.51
23.81%
FIS
Fidelity National Info
79.96
6.87
9.40%
FI
Fiserv
160.14
12.32
8.33%
INFY
Infosys
18.49
1.92
11.59%

Jack Henry & Associates Corporate Events

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
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.