Strong Return on Equity
Moderate Price-to-Earnings Ratio
Healthy Profit Margins
Solid Cash Flow Generation
Low Debt Levels
Strong Interest Coverage
🏆 Strong Financial Performance
🤝 High Client Retention
🔑 Market Leadership
🚀 Growth in Digital Payment Solutions
🔄 Cloud Transition Acceleration
📈 Positive Industry Trends
High Price-to-Sales Ratio
Elevated EV/EBITDA Ratio
Low Cash Ratio
Overall, Jack Henry & Associates demonstrates strong business quality with solid financial performance, high client retention, and leading market positions. Future prospects appear positive, driven by innovations in digital payments and cloud solutions, alongside favorable industry trends.
Analysis Date: February 5, 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
$151.18
Current Market Price: $172.18
IV/P Ratio: 0.88x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-14.000000000000002%
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 JKHY
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (31.13)
P/B ratio ≤ 1.5 (6.39)
Current ratio ≥ 2.0 (1.17x)
Long-term debt < Net current assets (0.73x)
Margin of safety (-14.000000000000002%)
JKHY does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
JKHY shows strong gross profit margin of 41.42%, operating profit margin of 22.65%, and net profit margin of 17.82%, indicating effective cost control and pricing power.
Operating cash flow per share of $7.33 indicates strong cash generation capabilities, supporting ongoing operations and investment.
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
21.55%
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
3.36%
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
41.42%
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
17.82%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
With a debt-to-equity ratio of 0.076 and debt-to-assets ratio of 0.052, JKHY has a strong balance sheet with minimal reliance on debt.
An interest coverage ratio of 36.97 indicates that JKHY can easily meet its interest obligations, reflecting strong financial stability.
The cash ratio of 0.052 suggests limited liquidity in covering immediate obligations, which may be a concern in a downturn.
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
0.08x
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
Q2 2025
Current Ratio
Current assets divided by current liabilities
1.17x
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
Q2 2025
Jack Henry & Associates reported non-GAAP revenue growth of 6.1% in Q2, slightly ahead of expectations, with a non-GAAP operating margin of 21.5%. This reflects solid financial health and consistent execution.
The company boasts a core retention rate exceeding 99%, indicating strong client loyalty and satisfaction. This is supported by impressive renewal rates, including 28 core renewals in Q2, which is a 21% increase over the prior year.
Jack Henry's Scimitar core platform remains the largest for credit unions, holding nearly 50% market share. This competitive edge reinforces their strong market position.
The company is focused on expanding its digital payment solutions, with strong growth in products like Financial Crimes Defender and continued success in their Bano platform, which saw a 20% increase in registered users year-over-year.
Jack Henry is seeing a shift from in-house processing to private cloud solutions, which is expected to drive future revenue growth and improve margins. Currently, 75% of clients are on a private cloud.
The broader industry is expected to increase technology spending, which aligns with Jack Henry’s offerings. Surveys indicate that 73% of banks and 79% of credit unions plan to increase technology spending in 2025.