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Jack Henry & Associates (NasdaqGS:JKHY) Q1 2021 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Jack Henry & Associates, Inc. (NasdaqGS:JKHY) is scheduled to report Q1 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $1.05/share on revenue of $446.9 million. The consensus earnings per share (EPS) of $1.05/share is based on a poll of 12 analysts and represents a decline in eps of −9.1% over the same quarter last year, when the company reported earnings of $1.16/share.

The revenue forecast of $446.9 million based on a poll of 12 analysts implies a year-over-year (YoY) growth in revenue of 2.0%. Last year the company reported $438 million in revenue for the quarter.

Expected to report EPS contraction of −9.1% for Q1, 2021
Metric Expected Prior Year YoY Change
Revenue $446.91 $438.00 2.0%
EPS $1.05 $1.16 −9.1%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Jack Henry & Associates, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2020 $0.78 $0.80 2.0% Beat
Q3, 2020 $0.80 $0.96 19.6% Beat
Q2, 2020 $0.89 $0.94 5.5% Beat
Q1, 2020 $1.04 $1.16 11.5% Beat
Q4, 2019 $0.77 $0.79 3.1% Beat
Q3, 2019 $0.76 $0.77 0.7% Beat
Q2, 2019 $0.85 $0.88 3.7% Beat
Q1, 2019 $0.94 $1.08 15.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −13.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 18, 2020 $199.13 $172.22 −13.5% Decline
May 4, 2020 $158.50 $176.20 11.2% Increase
February 4, 2020 $151.98 $163.98 7.9% Increase
November 4, 2019 $141.74 $145.64 2.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.91, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.91 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Jack Henry & Associates, Inc. is currently trading at -/share, up – for the day. The company is trading at approximately 74.6% of its 52-week high of $200.98/share. The company’s stock price is up – since the last earnings report and up – over the previous week. The company’s 14 Day Relative Price Index (RSI) of 33.04 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:JKHY Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 38.63 and a forward P/E multiple of 41.15.

Jack Henry & Associates, Inc.’s current share price also implies a price-to-book (P/B) multiple of 7.39. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q4
Period End Date June 30, 2020
Price To Sales 6.7x
P/E Ratio 38.6x
P/E Ratio (Fwd) 41.1x
PEG Ratio 4.0
Total Debt / Total Capital 0.6%
Levered Free Cash Flow $457 million
EV / EBITDA 25.3x

Finbox

Jack Henry & Associates, Inc. is a large-cap stock with a market capitalization of $11.542 billion and a total enterprise value of $11.397 billion. The company operates in the Information Technology sector and the IT Services industry.

Jack Henry & Associates, Inc. provides technology solutions and payment processing services primarily for financial services organizations in the United States. The company offers information and transaction processing solutions for banks ranging from community to multi-billion-dollar asset institutions under the Jack Henry Banking brand; core data processing solutions for various credit unions under the Symitar brand; and specialized financial performance, imaging and payments processing, information security and risk management, retail delivery, and online and mobile solutions to financial institutions and corporate entities under the ProfitStars brand. It also provides a suite of integrated applications required to process deposit, loan, and general ledger transactions, as well as to maintain centralized customer/member information; and complementary products and services that enable core bank and credit union clients to respond to evolving customer/member demands. The company’s Jack Henry Banking business brand offers SilverLake, a robust primarily designed for commercial-focused banks; CIF 20/20, a parameter-driven, easy-to-use system for banks; and Core Director, a cost-efficient system with point-and-click operation. Its Symitar business brand provides Episys, a robust designed for credit unions; and CruiseNet, a cost-efficient system designed primarily for credit unions. In addition, the company offers electronic payment solutions; purchases and resells hardware systems, including servers, workstations, scanners, and other devices; and provides implementation, training, and support services. Jack Henry & Associates, Inc. was founded in 1976 and is headquartered in Monett, Missouri.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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