Reasonable Price-to-Sales Ratio
Strong Return on Equity
Healthy Gross Profit Margin
Good Liquidity Ratios
Interest Coverage Ratio
🌟 Strong Revenue Growth
📈 Impressive Backlog Growth
🛡️ Diversified Market Position
🚀 Positive Growth Outlook
🌍 International Expansion Opportunities
High Price-to-Earnings Ratio
Low Net Profit Margin
Moderate Debt Levels
⚠️ Decreased GAAP EPS
🔄 Potential Margin Fluctuations
Jacobs Solutions demonstrates strong business quality with significant revenue and backlog growth, supported by a diversified market presence. Future prospects appear positive, although potential margin fluctuations in Q2 may impact short-term performance. Overall, the company is well-positioned for sustainable growth.
Analysis Date: February 4, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$148.51
Current Market Price: $99.88
IV/P Ratio: 1.49x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
33.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for J
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (22.43)
P/B ratio ≤ 1.5 (3.29)
Current ratio ≥ 2.0 (1.25x)
Long-term debt < Net current assets (2.09x)
Margin of safety (33.0%)
J does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The return on equity (ROE) is 11.21%, which indicates that the company effectively uses shareholders' equity to generate profit, demonstrating solid profitability.
The gross profit margin stands at 22.41%, showing that the company retains a good share of revenue after accounting for the cost of goods sold.
The net profit margin is only 4.28%, indicating that a relatively small portion of revenue is retained as profit, which could be a concern for long-term profitability.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
11.21%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
-0.16%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
22.41%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
4.28%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The current and quick ratios are both above 1, indicating that the company has sufficient short-term assets to cover its short-term liabilities, reflecting strong liquidity.
With an interest coverage ratio of 6.15, the company generates enough earnings to easily cover its interest expenses, indicating good financial stability.
The debt-to-equity ratio is 0.72, indicating that the company has a moderate level of debt compared to equity, which could pose risks if not managed properly.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.61x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
1.25x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
Jacobs Solutions reported a 4% increase in gross revenue and a 5% increase in adjusted net revenue for Q1, indicating strong business performance and customer demand.
The company has a consolidated backlog that increased by 19% year-over-year, showcasing a strong pipeline of future work and robust demand across multiple sectors.
Jacobs has a strong presence in various sectors including Infrastructure, Advanced Facilities, and Life Sciences, with double-digit growth in key areas such as Water and Environmental services.
GAAP EPS was negative $0.10, primarily due to a significant mark-to-market loss associated with an investment in Amentum, indicating potential volatility in earnings.
Jacobs anticipates mid- to high single-digit growth for adjusted net revenue in fiscal '25, with expectations for adjusted EBITDA margins to reach between 13.8% and 14%.
The company is leveraging opportunities in international markets, particularly in the Middle East and Australia, with strong pipelines in water and infrastructure projects expected to drive future growth.
While margins are expected to improve, Q2 is anticipated to show a temporary dip in adjusted EBITDA margin due to seasonal factors, which could affect investor sentiment.