Monett, Missouri-based Jack Henry & Associates, Inc. (JKHY) operates as a fintech company that connects people and financial institutions through technology solutions and payment processing services that reduce the barriers to financial health. With a market cap of $12.7 billion, Jack Henry operates through Core, Payments, Complementary, and Corporate & Other segments.
The fintech major has lagged behind the broader market over the past year. JKHY has gained 6.5% on a YTD basis and 13% over the past year lagging behind the S&P 500 Index’s ($SPX) 25.8% gains in 2024 and 31.8% returns over the past year.
Narrowing the focus, JKHY has also lagged behind the Global X FinTech ETF’s (FINX) surge of 32.3% on a YTD basis and 55.3% over the past 52 weeks.
Despite reporting better-than-expected results, Jack Henry & Associates’ stock prices dipped 2.8% in the trading session after the release of its Q1 earnings on Nov. 5. JKHY’s sales team has maintained a robust topline momentum reporting a new record sales attainment for Q1 and increasing their sales pipeline to an all-time high. Its adjusted revenue for the quarter grew 5.3% year-over-year to approximately $597.3 million. Moreover, the company reported even more impressive growth in profitability, with its EPS surging 17.3% year-over-year to $1.63, exceeding analysts’ estimates by 1.2%.
However, the company’s operating cash flows have observed a divergence from earnings and despite the massive growth in profitability, Jack Henry’s cash flow from operations declined 25.6% year-over-year to $116.9 million, which raised concerns among investors.
Nevertheless, for the current fiscal year, ending in June 2025, analysts expect JKHY to report a robust 10.9% year-over-year growth in EPS to $5.80. Moreover, the company has a robust earnings surprise history. It has surpassed analysts’ earnings estimates in each of the past four quarters.
JKHY stock has a consensus “Moderate Buy” rating overall. Out of the 17 analysts covering the stock, five recommend “Strong Buy,” 11 advise “Hold,” and one suggests a “Strong Sell” rating.
This configuration has been mostly stable over the past three months.
On Nov. 7, RBC Capital analyst Daniel Perlin maintained a “Sector Perform” rating while raising the price target to $203, indicating a 16.7% potential upside from current price levels.
JKHY’s mean price target of $191.64 represents a premium of 10.2% to current price levels. Meanwhile, the Street-high target of $212 suggests a staggering 21.9% upside potential.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- What Will Traders be Watching as November Comes to an End?
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