Jack Henry & Associates Inc
NASDAQ:JKHY
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Intrinsic Value
The intrinsic value of one JKHY stock under the Base Case scenario is 143.93 USD. Compared to the current market price of 172.5 USD, Jack Henry & Associates Inc is Overvalued by 17%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
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Jack Henry & Associates Inc
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Fundamental Analysis
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Jack Henry & Associates Inc
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Jack Henry & Associates Inc. is a leading provider of technology solutions and payment processing services primarily for banks and credit unions throughout the United States. Founded in 1976, the company has steadily grown by focusing on delivering innovative software and services that streamline financial operations and enhance customer experience. With its comprehensive suite of offerings—including core processing systems, digital banking solutions, and robust payment services—Jack Henry addresses the evolving needs of its financial institution clients, enabling them to compete effectively in an increasingly digital landscape. The company's commitment to quality and partnership has earned...
Jack Henry & Associates Inc. is a leading provider of technology solutions and payment processing services primarily for banks and credit unions throughout the United States. Founded in 1976, the company has steadily grown by focusing on delivering innovative software and services that streamline financial operations and enhance customer experience. With its comprehensive suite of offerings—including core processing systems, digital banking solutions, and robust payment services—Jack Henry addresses the evolving needs of its financial institution clients, enabling them to compete effectively in an increasingly digital landscape. The company's commitment to quality and partnership has earned it a stellar reputation, fostering strong client retention and long-term relationships.
For investors, Jack Henry presents a compelling opportunity characterized by consistent revenue growth and a resilient business model anchored in recurring service fees from a diverse client base. The fintech landscape is rapidly evolving, and Jack Henry's strategic emphasis on innovation ensures it remains at the forefront of this change. By continuously investing in technology and expanding its product offerings, Jack Henry not only strengthens its competitive edge but also positions itself favorably for future growth. As more consumers gravitate toward digital banking, Jack Henry is well-equipped to capitalize on this shift, making it a promising contender in the technology services sector for financial institutions.
Jack Henry & Associates, Inc. is a prominent technology solutions provider for the financial services industry, particularly targeting banks and credit unions. The company operates primarily through several core business segments, each focusing on different aspects of financial technology. Here are the main segments:
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Banking Division:
- This segment provides a wide range of solutions tailored for banks, including core processing systems, payment solutions, and compliance tools. The offerings help institutions manage their operations, enhance customer service, and stay compliant with financial regulations.
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Credit Union Division:
- Similar to its banking division, this segment focuses specifically on credit unions. It offers core processing and various technology services that enable credit unions to efficiently serve their members and improve their operational effectiveness.
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Payments Solutions:
- This segment encompasses payment processing services and technologies. Jack Henry offers various payment solutions, including ACH processing, card services, and digital payment systems, facilitating secure and efficient transactions for financial institutions and their customers.
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Other Services:
- This includes a range of ancillary services and products that support the primary offerings. This may include consulting, data analytics, and other services that help financial institutions leverage technology for better decision-making and improved operational efficiency.
By catering to the unique needs of banks and credit unions, Jack Henry & Associates positions itself as a key player in the financial technology landscape, enabling its clients to enhance their service offerings and operational capabilities.
Jack Henry & Associates, Inc. (JHA) is a technology solutions provider primarily serving the financial services sector, specifically community banks and credit unions. Here are some unique competitive advantages JHA holds over its rivals:
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Niche Focus on Community Banks and Credit Unions: JHA concentrates on serving smaller financial institutions, allowing it to tailor its offerings and customer service specifically to their needs. This specialization fosters strong relationships and loyalty among its client base.
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Comprehensive Product Suite: JHA offers a broad range of integrated solutions that cover various aspects of banking operations—from transaction processing and core banking systems to payments and digital banking solutions. This all-in-one capability simplifies vendor management for clients.
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Strong Reputation and Longevity: Founded in 1976, JHA has built a solid reputation in the industry. Its long-standing presence provides a level of trust and reliability that can be appealing to potential customers.
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High Customer Retention Rates: JHA typically enjoys high customer retention and satisfaction rates. This is crucial in the banking sector, as customer churn can be costly and disruptive.
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Customization: JHA provides flexibility and customization in its solutions, allowing clients to adapt services and products according to their specific operational needs and regulatory requirements.
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Scalable Solutions: JHA’s offerings are designed to scale with the growth of financial institutions. This means clients can invest in JHA technology without worrying about outgrowing their systems as they expand.
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Strong support services and training: The company emphasizes customer support, providing training and assistance that can help institutions effectively utilize their technology, thus enhancing user experience and satisfaction.
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Innovative Technology: JHA invests in technology advancements and innovation, keeping its offerings modern and efficient. This includes features like cloud-based solutions, which enhance operational flexibility and security.
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Data Security and Compliance: Given the regulatory environment around financial services, JHA places a strong emphasis on security and compliance, which reassures clients and differentiates it from less focused competitors.
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Partnership Ecosystem: JHA has developed a vast network of partners and third-party vendors, enhancing its product offerings and allowing for seamless integration with various financial technologies.
These competitive advantages help Jack Henry & Associates maintain a strong position in the market, particularly among nonprofit community-focused financial institutions that prioritize personal service, reliability, and tailored solutions.
Jack Henry & Associates Inc. (JHA), a provider of technology solutions for the financial services industry, faces several risks and challenges in the near future:
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Regulatory Compliance: The financial services industry is heavily regulated, and JHA must continually adapt its services and solutions to comply with new regulations, which can be costly and time-consuming.
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Cybersecurity Threats: As a technology provider, JHA is susceptible to cybersecurity threats. Data breaches or attacks on their systems could lead to significant financial losses and damage to their reputation.
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Technological Innovation: The pace of technological change is rapid, and JHA needs to continuously innovate to remain competitive. Failure to do so could result in losing market share to more agile competitors or fintech firms.
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Market Competition: The financial technology space is crowded with competitors, including traditional banking solution providers and emerging fintech startups. JHA must differentiate its offerings and maintain a competitive edge.
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Customer Retention and Satisfaction: Maintaining strong relationships with customers is paramount. Any deterioration in service quality or support could lead to customer attrition, impacting revenue.
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Economic Conditions: Economic downturns or fluctuations can impact JHA's clients, particularly community banks and credit unions, potentially leading to reduced spending on technology solutions.
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Integration Challenges: JHA often acquires companies or partners with others to expand its offerings. Integration of new technologies and cultures can pose challenges, which may affect operational efficiency and service delivery.
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Workforce Challenges: The success of technology companies often hinges on attracting and retaining skilled talent. JHA faces competition for top talent in a tight labor market, which can influence its operational capabilities.
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Scalability Issues: As JHA grows, it needs to ensure that its infrastructure and operations can scale effectively to handle increased demand without compromising service quality.
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Changing Consumer Preferences: The preferences of end-users (bank customers) are rapidly evolving, particularly towards mobile and digital banking solutions. JHA must anticipate these changes and align its offerings accordingly.
By staying aware of these risks and actively developing strategies to mitigate them, JHA can position itself for sustainable growth in the evolving financial technology landscape.
Revenue & Expenses Breakdown
Jack Henry & Associates Inc
Balance Sheet Decomposition
Jack Henry & Associates Inc
Current Assets | 632m |
Cash & Short-Term Investments | 38.3m |
Receivables | 372.8m |
Other Current Assets | 220.9m |
Non-Current Assets | 2.3B |
Long-Term Investments | 25.8m |
PP&E | 269.1m |
Intangibles | 1.5B |
Other Non-Current Assets | 521.2m |
Current Liabilities | 633.8m |
Accounts Payable | 25.3m |
Accrued Liabilities | 200.8m |
Other Current Liabilities | 407.7m |
Non-Current Liabilities | 448.3m |
Long-Term Debt | 60m |
Other Non-Current Liabilities | 388.3m |
Earnings Waterfall
Jack Henry & Associates Inc
Revenue
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2.2B
USD
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Cost of Revenue
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-1.3B
USD
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Gross Profit
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916.1m
USD
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Operating Expenses
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-426.7m
USD
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Operating Income
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489.4m
USD
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Other Expenses
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-107.6m
USD
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Net Income
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381.8m
USD
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Free Cash Flow Analysis
Jack Henry & Associates Inc
USD | |
Free Cash Flow | USD |
Jack Henry posted a strong Q1 for fiscal 2025, with non-GAAP revenue growth of 5.3%, surpassing the forecast of 5.25%. The company reaffirmed its full-year revenue growth guidance of 7% to 8%. Non-GAAP margin contraction was limited to 89 basis points, less than the anticipated 100 basis points. The quarter also saw record sales with six core wins, including a $7 billion institution. Q2 is projected to see non-GAAP revenue growth around 6%, while margins are expected to remain flat. The firm is optimistic about accelerating growth in the latter half of the year due to favorable comps and ongoing implementation success.
What is Earnings Call?
JKHY Profitability Score
Profitability Due Diligence
Jack Henry & Associates Inc's profitability score is 62/100. The higher the profitability score, the more profitable the company is.
Score
Jack Henry & Associates Inc's profitability score is 62/100. The higher the profitability score, the more profitable the company is.
JKHY Solvency Score
Solvency Due Diligence
Jack Henry & Associates Inc's solvency score is 82/100. The higher the solvency score, the more solvent the company is.
Score
Jack Henry & Associates Inc's solvency score is 82/100. The higher the solvency score, the more solvent the company is.
Wall St
Price Targets
JKHY Price Targets Summary
Jack Henry & Associates Inc
According to Wall Street analysts, the average 1-year price target for JKHY is 196.78 USD with a low forecast of 176.75 USD and a high forecast of 222.6 USD.
Dividends
Current shareholder yield for JKHY is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Ownership
JKHY Insider Trading
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Profile
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Description
Jack Henry & Associates, Inc. engages in the provision of technology solutions and payment processing services primarily for financial services organizations. The company is headquartered in Monett, Missouri and currently employs 6,714 full-time employees. The firm operates through four segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consists of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including automated teller machine (ATM), debit, and credit card processing services; online and mobile bill pay solutions; automated clearinghouse (ACH) origination and remote deposit capture processing; and risk management products and services. The Complementary segment provides additional software and services that can be integrated with the Company's core solutions or used independently.
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IPO
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Officers
The intrinsic value of one JKHY stock under the Base Case scenario is 143.93 USD.
Compared to the current market price of 172.5 USD, Jack Henry & Associates Inc is Overvalued by 17%.