Jack Henry & Associates Inc (JKHY, Financial) has recently garnered attention from the investment community, showcasing a solid financial profile that's piqued the interest of both investors and analysts. With a current share price of $170.89, the company has enjoyed a modest daily uptick of 0.25%, alongside a more significant three-month growth of 4.01%. A deep dive into the company's GF Score reveals a promising outlook for Jack Henry & Associates Inc, indicating a strong potential for future growth.
What Is the GF Score?
The GF Score is an exclusive stock performance ranking system created by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield better returns than those with lower scores. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Jack Henry & Associates Inc boasts a perfect GF Score of 100, signaling exceptional growth prospects.
- Financial strength rank: 8/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 9/10
- Momentum rank: 10/10
Understanding Jack Henry & Associates Inc's Business
Jack Henry & Associates Inc, with a market cap of $12.45 billion and sales of $2.16 billion, is a leading provider of core processing and complementary services for U.S. banks and credit unions, particularly focusing on small and midsize institutions. The company's operating margin stands at a healthy 22.42%, reflecting its efficient operations. Jack Henry serves nearly 1,000 banks and over 700 credit unions, offering services such as electronic funds transfer, payment processing, and loan processing.
Financial Strength Breakdown
Jack Henry & Associates Inc's Financial Strength rating is a testament to its resilient balance sheet and adept capital management. The company's Interest Coverage ratio is an impressive 26.68, indicating a strong ability to meet interest obligations. This is well above the threshold of 5 preferred by the esteemed investor Benjamin Graham. The Altman Z-Score of 10.2 further highlights the company's financial stability and low risk of distress. Additionally, a Debt-to-Revenue ratio of 0.12 showcases Jack Henry & Associates Inc's strategic and conservative approach to debt.
Profitability Rank Breakdown
The company's Profitability Rank is outstanding, reflecting its superior ability to generate profits compared to its peers. Over the past five years, Jack Henry & Associates Inc's Operating Margin has shown consistent improvement, indicating an increasing efficiency in converting revenue into profit. The company's Gross Margin has also been on an upward trajectory, further emphasizing its profitability. The Piotroski F-Score and a Predictability Rank of 5 stars reinforce the company's solid financial standing and reliable operational performance.
Growth Rank Breakdown
Jack Henry & Associates Inc's high Growth Rank underscores its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 8.8% surpasses more than half of the companies in the Software industry. Additionally, the company's EBITDA has seen significant growth, with a three-year growth rate of 9 and a five-year rate of 8, highlighting its ability to sustain growth and profitability.
Conclusion: A Strong Investment Prospect
Considering Jack Henry & Associates Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score accentuates the company's exceptional position for potential market outperformance. Investors seeking companies with similar financial fortitude can explore more options using the GF Score Screen. With its strong fundamentals and strategic market position, Jack Henry & Associates Inc stands as a compelling investment opportunity for those looking to capitalize on financial growth and competitive advantage.
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.
