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Why Is Jack Henry (JKHY) Up 2.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jack Henry due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Jack Henry's Q4 Earnings Beat, Revenues Up Y/Y
Jack Henry & Associates reported first-quarter fiscal 2021 earnings of $1.19per share, which surpassed the Zacks Consensus Estimate by 11.2%. Further, the bottom line inched up 2.6% from the year-ago quarter and also rose 48.7% from the previous quarter.
Revenues too improved 3% year over year and 10.1% sequentially to $451.8 million. Further, the top line outpaced the Zacks Consensus Estimate of $443.6 million.
Moreover, the company’s non-GAAP revenues were $445.9 million, up 5% on a year-over-year basis and 11.5% sequentially.
The top line was driven by a solid performance of Core, Payments and Complementary segments during the reported quarter. Additionally, accelerating processing, and services and support revenues contributed to the results.
However, sluggishness in the Corporate segment remained an overhang.
Top Line in Detail
Services & Support: The company generated revenues of $280.9 million from this category (62% of revenues). Notably, the figure improved 1% from the year-ago quarter, courtesy of higher data processing, software usage fees and hosting fees.
Processing: This category yielded revenues worth $170.8 million (38% of revenues) during the reported quarter, up 7% year over year. This can be attributed to growth in card processing transaction volumes and a hike in associated fee revenues. Further, the rising Jack Henry digital revenues contributed well.
Segments in Detail
Core: The company generated revenues of $159.03 million from this segment (35.2% of total revenues), improving 2% year over year.
Payments: This segment yielded revenues of$156.7 million (34.7% of total revenues), increasing 5% from the year-ago quarter.
Complementary: This segment generated $124.5 million revenues (27.6% of total revenues), increasing 6% year over year.
Corporate & Other: The company generated revenues of $11.6 million from this segment (2.5% of total revenues), down 23.8% from the prior-year quarter.
Operating Details
In first-quarter fiscal 2021, total operating expenses were $334.2 million, reflecting an increase of 5% year over year. This can primarily be attributed to rising headcounts, which induced higher personnel costs and salaries.
As a percentage of revenues, the figure expanded 90 basis points (bps) year over year to 73.9%.
Notably, research and development expenses rose 6% year over year to $26.1 million. Selling, general and administrative expenses were $45.2 million, down 9% from the year-ago quarter.
Notably, operating margin was 26% in the reported quarter, which contracted 100 bps year over year.
Balance Sheet
As of Sep 30, 2020, cash and cash equivalents totaled $195.3 million, which decreased from $213.3 million as of Jun 30, 2020.
Trade receivables were nearly $223 million, downfrom $300.9million in the previous quarter.
Further, the current and long-term debt stood at $295,000 at the end of the fiscal first quarter compared with $323,000 at the end of the fourth-quarter fiscal 2020.
Guidance
For fiscal 2021, the company projects GAAP revenues between $1.76 billion and $1.77 billion. Notably, the company raised the lower end of the guided range, which previously stood at $1.75 billion.
The company narrowed the guided range for year-over-year growth in its non-GAAP revenues from 5.5-6.5% to 6-6.5%.
Further, the company upped the earnings per share outlook for fiscal 2021 to $3.75-$3.80 from the range of $3.70-$3.75.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Jack Henry has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jack Henry has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Jack Henry (JKHY) Up 2.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jack Henry due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Jack Henry's Q4 Earnings Beat, Revenues Up Y/Y
Jack Henry & Associates reported first-quarter fiscal 2021 earnings of $1.19per share, which surpassed the Zacks Consensus Estimate by 11.2%. Further, the bottom line inched up 2.6% from the year-ago quarter and also rose 48.7% from the previous quarter.
Revenues too improved 3% year over year and 10.1% sequentially to $451.8 million. Further, the top line outpaced the Zacks Consensus Estimate of $443.6 million.
Moreover, the company’s non-GAAP revenues were $445.9 million, up 5% on a year-over-year basis and 11.5% sequentially.
The top line was driven by a solid performance of Core, Payments and Complementary segments during the reported quarter. Additionally, accelerating processing, and services and support revenues contributed to the results.
However, sluggishness in the Corporate segment remained an overhang.
Top Line in Detail
Services & Support: The company generated revenues of $280.9 million from this category (62% of revenues). Notably, the figure improved 1% from the year-ago quarter, courtesy of higher data processing, software usage fees and hosting fees.
Processing: This category yielded revenues worth $170.8 million (38% of revenues) during the reported quarter, up 7% year over year. This can be attributed to growth in card processing transaction volumes and a hike in associated fee revenues. Further, the rising Jack Henry digital revenues contributed well.
Segments in Detail
Core: The company generated revenues of $159.03 million from this segment (35.2% of total revenues), improving 2% year over year.
Payments: This segment yielded revenues of$156.7 million (34.7% of total revenues), increasing 5% from the year-ago quarter.
Complementary: This segment generated $124.5 million revenues (27.6% of total revenues), increasing 6% year over year.
Corporate & Other: The company generated revenues of $11.6 million from this segment (2.5% of total revenues), down 23.8% from the prior-year quarter.
Operating Details
In first-quarter fiscal 2021, total operating expenses were $334.2 million, reflecting an increase of 5% year over year. This can primarily be attributed to rising headcounts, which induced higher personnel costs and salaries.
As a percentage of revenues, the figure expanded 90 basis points (bps) year over year to 73.9%.
Notably, research and development expenses rose 6% year over year to $26.1 million. Selling, general and administrative expenses were $45.2 million, down 9% from the year-ago quarter.
Notably, operating margin was 26% in the reported quarter, which contracted 100 bps year over year.
Balance Sheet
As of Sep 30, 2020, cash and cash equivalents totaled $195.3 million, which decreased from $213.3 million as of Jun 30, 2020.
Trade receivables were nearly $223 million, downfrom $300.9million in the previous quarter.
Further, the current and long-term debt stood at $295,000 at the end of the fiscal first quarter compared with $323,000 at the end of the fourth-quarter fiscal 2020.
Guidance
For fiscal 2021, the company projects GAAP revenues between $1.76 billion and $1.77 billion. Notably, the company raised the lower end of the guided range, which previously stood at $1.75 billion.
The company narrowed the guided range for year-over-year growth in its non-GAAP revenues from 5.5-6.5% to 6-6.5%.
Further, the company upped the earnings per share outlook for fiscal 2021 to $3.75-$3.80 from the range of $3.70-$3.75.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Jack Henry has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jack Henry has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.