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Valued at a market cap of $12.6 billion, Jack Henry & Associates, Inc. (JKHY) is a financial technology company that connects people and financial institutions through technology solutions and payment processing services. It is based in Monett, Missouri, and offers transaction processing, business process automation, and information management solutions and services.
Shares of this fintech company have significantly underperformed the broader market over the past 52 weeks. Jack Henry has declined 1.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17%. Moreover, on a YTD basis, the stock is down marginally compared to SPX’s 1.3% rise.
Narrowing the focus, JKHY has lagged behind the Technology Select Sector SPDR Fund’s (XLK) 11.3% return over the past 52 weeks but has outpaced XLK’s 1.7% decline on a YTD basis.
Shares of JKHY closed down marginally following its mixed Q2 earnings release on Feb. 4. The company delivered a profit of $1.34 per share, which improved by 6.3% from the year-ago quarter and exceeded the consensus estimates by 2.3%. On the other hand, its revenue grew 5.2% year-over-year to $573.8 million but marginally fell short of the Wall Street estimates, primarily due to weaker-than-expected growth in its Services and Support segment.
For the current fiscal year, ending in June, analysts expect JKHY’s EPS to grow 11.5% year over year to $5.83. The company’s earnings surprise history is promising. It exceeded the Wall Street estimates in each of the last four quarters.
Among the 18 analysts covering the stock, the consensus rating is a “Hold,” which is based on five “Strong Buy,” 10 “Hold,” and three “Strong Sell” ratings.
On Feb. 6, RBC Capital analyst Daniel Perlin maintained a “Hold” rating on Jack Henry and set a price target of $203, which indicates a 16.6% potential upside from the current levels.
The mean price target of $187.47 represents a 7.7% upside from JKHY’s current price levels, while the Street-high price target of $212 suggests an upside potential of 21.8%.
