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Jack Henry (JKHY) Down 1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have lost about 1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jack Henry due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Jack Henry's Q3 Earnings Beat
Jack Henry & Associates reported third-quarter fiscal 2022 earnings of $1.16 per share, which surpassed the Zacks Consensus Estimate by 9.4%. Further, the bottom line increased 22.1% year over year.
Revenues improved 10% year over year to $478.3 million, in line with the Zacks Consensus Estimate.
The company’s non-GAAP revenues were $460.8 million, up 7% from the year-ago quarter.
Top-line growth was driven by increased processing, and services and support revenues. Additionally, strength across the Core, Payments and Complementary segments drove the results.
Top Line in Detail
Services & Support: The company generated revenues of $282.9 million from the category (59% of revenues). Notably, the figure rose 11% from the year-ago quarter, owing to growth in data processing and hosting fees, and implementation revenues. Also, accelerating deconversion fee revenues were tailwinds.
Processing: The category yielded revenues of $195.3 million (41% of revenues) in the reported quarter, up 9% year over year. This can be attributed to 6% growth in card-processing fee revenues.
Segments in Detail
Core: The company generated revenues of $150.8 million from the segment (31.5% of total revenues), increasing 12% year over year.
Payments: The segment yielded revenues of $177.5 million (37.1% of total revenues), increasing 10% from the year-ago quarter.
Complementary: The segment generated $137.7 million in revenues (28.8% of total revenues), increasing 10% year over year.
Corporate & Other: The company generated revenues of $12.2 million from the segment (2.6% of total revenues), down 1% from the prior-year quarter.
Operating Details
In third-quarter fiscal 2022, total operating expenses were $366.7 million, reflecting a year-over-year increase of 7%. This can primarily be attributed to higher personnel and travel costs, and rising expenses related to the company’s card-processing platform.
As a percentage of revenues, the figure contracted 230 basis points (bps) year over year to 76.6%.
Notably, the operating margin was 22% in the reported quarter, which expanded 200 bps on a year-over-year basis.
Balance Sheet
As of Dec 31, 2021, cash and cash equivalents totaled $39.8 million, which increased from $29.1 million as of Dec 31, 2021.
Trade receivables were $222.7 million in the reported quarter, down from $236.1 million in the previous quarter.
The current and long-term debt stood at $225.1 million at the end of the fiscal third quarter compared with $240.1 million at the end of the fiscal second quarter.
Guidance
For fiscal 2022, the company expects GAAP revenues of $1.939-$1.942 billion.
The company anticipates non-GAAP revenues of $1.889-$1.892 billion.
It raised the guidance for earnings from $4.75-$4.82 per share to $4.80-$4.85 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.13% due to these changes.
VGM Scores
At this time, Jack Henry has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 #2 (Buy). We expect an above average return from the stock in the next few months.
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Jack Henry (JKHY) Down 1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have lost about 1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jack Henry due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Jack Henry's Q3 Earnings Beat
Jack Henry & Associates reported third-quarter fiscal 2022 earnings of $1.16 per share, which surpassed the Zacks Consensus Estimate by 9.4%. Further, the bottom line increased 22.1% year over year.
Revenues improved 10% year over year to $478.3 million, in line with the Zacks Consensus Estimate.
The company’s non-GAAP revenues were $460.8 million, up 7% from the year-ago quarter.
Top-line growth was driven by increased processing, and services and support revenues. Additionally, strength across the Core, Payments and Complementary segments drove the results.
Top Line in Detail
Services & Support: The company generated revenues of $282.9 million from the category (59% of revenues). Notably, the figure rose 11% from the year-ago quarter, owing to growth in data processing and hosting fees, and implementation revenues. Also, accelerating deconversion fee revenues were tailwinds.
Processing: The category yielded revenues of $195.3 million (41% of revenues) in the reported quarter, up 9% year over year. This can be attributed to 6% growth in card-processing fee revenues.
Segments in Detail
Core: The company generated revenues of $150.8 million from the segment (31.5% of total revenues), increasing 12% year over year.
Payments: The segment yielded revenues of $177.5 million (37.1% of total revenues), increasing 10% from the year-ago quarter.
Complementary: The segment generated $137.7 million in revenues (28.8% of total revenues), increasing 10% year over year.
Corporate & Other: The company generated revenues of $12.2 million from the segment (2.6% of total revenues), down 1% from the prior-year quarter.
Operating Details
In third-quarter fiscal 2022, total operating expenses were $366.7 million, reflecting a year-over-year increase of 7%. This can primarily be attributed to higher personnel and travel costs, and rising expenses related to the company’s card-processing platform.
As a percentage of revenues, the figure contracted 230 basis points (bps) year over year to 76.6%.
Notably, the operating margin was 22% in the reported quarter, which expanded 200 bps on a year-over-year basis.
Balance Sheet
As of Dec 31, 2021, cash and cash equivalents totaled $39.8 million, which increased from $29.1 million as of Dec 31, 2021.
Trade receivables were $222.7 million in the reported quarter, down from $236.1 million in the previous quarter.
The current and long-term debt stood at $225.1 million at the end of the fiscal third quarter compared with $240.1 million at the end of the fiscal second quarter.
Guidance
For fiscal 2022, the company expects GAAP revenues of $1.939-$1.942 billion.
The company anticipates non-GAAP revenues of $1.889-$1.892 billion.
It raised the guidance for earnings from $4.75-$4.82 per share to $4.80-$4.85 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.13% due to these changes.
VGM Scores
At this time, Jack Henry has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 #2 (Buy). We expect an above average return from the stock in the next few months.