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 $174.50, Jack Henry & Associates Inc has witnessed a daily loss of 0.69%, marked against a three-month change of 19.12%. A thorough analysis, underlined by the GF Score, suggests that Jack Henry & Associates Inc is well-positioned for substantial growth in the near future.
What Is 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.
- Financial strength rank: 8/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 7/10
- 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 financial strength, profitability, and growth, and slightly lower yet strong ranks in GF Value and momentum, GuruFocus assigned Jack Henry & Associates Inc the GF Score of 98 out of 100, which signals the highest outperformance potential.
Understanding Jack Henry & Associates Inc's Business
Jack Henry & Associates Inc, with a market cap of $12.72 billion and sales of $2.16 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, with a focus on small and midsize banks. Jack Henry serves almost 1,000 banks and over 700 credit unions. The company's operating margin stands at a healthy 22.42%, reflecting its efficient operations and strong market position.
Financial Strength Breakdown
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 26.68, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 10.42, Jack Henry & Associates Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.12, Jack Henry & Associates Inc's strategic handling of debt 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 Operating Margin has increased over the past five years, indicating a growing proficiency in transforming revenue into profit. The Piotroski F-Score confirms Jack Henry & Associates Inc's solid financial situation, and its 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 50.38% of companies in the Software industry. Moreover, Jack Henry & Associates Inc has seen a robust increase in its EBITDA over the past few years, accentuating the company's continued capability to drive growth.
Next Steps
Considering Jack Henry & Associates Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on such robust financial health and promising growth trajectory may find Jack Henry & Associates Inc an attractive addition to their portfolios. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
