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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.
