Jack Henry & Associates Inc (JKHY, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $157.13, Jack Henry & Associates Inc has witnessed a decline of 0.98% over a period, marked against a three-month change of 6.09%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Jack Henry & Associates Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Jack Henry & Associates Inc has been assigned the following ranks:
- 1. Financial strength rank: 7/10
- 2. Profitability rank: 10/10
- 3. Growth rank: 10/10
- 4. GF Value rank: 7/10
- 5. Momentum rank: 7/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability and growth, and solid ranks in financial strength, GF value, and momentum, GuruFocus assigned Jack Henry & Associates Inc the GF Score of 97 out of 100, which signals the highest outperformance potential.
Overview of Jack Henry & Associates Inc's Business
Jack Henry & Associates Inc, with a market cap of $11.46 billion and sales of $2.08 billion, is a leading provider of core processing and complementary services, such as electronic funds transfer, payment processing, and loan processing for U.S. banks and credit unions. The company focuses on small and midsize banks, serving almost 1,000 banks and over 700 credit unions. With an operating margin of 23.14%, the company demonstrates efficient operations and profitability.
Financial Strength Analysis
According to the Financial Strength rating, Jack Henry & Associates Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Jack Henry & Associates Inc stands impressively at 31.89, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 8.78, Jack Henry & Associates Inc exhibits a strong defense against financial distress. Furthermore, a favorable Debt-to-Revenue ratio of 0.13 solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Jack Henry & Associates Inc's impressive standing among its peers in generating profit. The company's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Jack Henry & Associates Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 8.8%, which outperforms better than 52.01% of 2390 companies in the Software industry. Moreover, Jack Henry & Associates Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 9, and the rate over the past five years is 8. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights Jack Henry & Associates Inc's unparalleled position for potential outperformance. This analysis suggests that Jack Henry & Associates Inc is a promising investment opportunity for value investors seeking robust returns.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
