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Why Is Jack Henry (JKHY) Down 2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have lost about 2% 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 Q4 Earnings Beat
Jack Henry & Associates reported fourth-quarter fiscal 2022 earnings of $1.10 per share, which surpassed the Zacks Consensus Estimate by 10%. Further, the bottom line increased 6% year over year.
Revenues improved 7% year over year to $482.7 million, which surpassed the Zacks Consensus Estimate of $480.8 million.
The company’s non-GAAP revenues were $477.4 million, up 8% from the year-ago quarter.
Top-line growth was driven by increased processing, and services and support revenues. Additionally, strength across the Core, Payments, Complementary and Corporate segments drove the results.
Top Line in Detail
Services & Support: The company generated revenues of $279.7 million from the category (58% of revenues). Notably, the figure rose 7% from the year-ago quarter, owing to growth in cloud processing revenues.
However, declining deconversion fees were negatives.
Processing: The category yielded revenues of $202.9 million (42% of revenues) in the reported quarter, up 8% year over year. This can be attributed to 31.3% growth in Jack Henry's digital revenues and growing card-processing fee revenues.
Segments in Detail
Core: The company generated revenues of $151.5 million from the segment (31.4% of the total revenues), increasing 8% year over year.
Payments: The segment yielded revenues of $177.3 million (36.7% of the total revenues), increasing 5% from the year-ago quarter.
Complementary: The segment generated $140.3 million in revenues (29.1% of the total revenues), increasing 9% year over year.
Corporate & Other: The company generated revenues of $13.6 million from the segment (2.8% of the total revenues), up 22% from the prior-year quarter.
Operating Details
In fourth-quarter fiscal 2022, total operating expenses were $378.9 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 10 basis points (bps) year over year to 78.5%.
Notably, the operating margin was 22% in the reported quarter, which expanded 100 bps on a year-over-year basis.
Balance Sheet
As of Jun 30, 2022, cash and cash equivalents totaled $48.8 million, which increased from $39.8 million as of Mar 31, 2022.
Trade receivables were $348.1 million in the reported quarter, up from $222.7 million in the previous quarter.
The current and long-term debt stood at $115.1 million at the end of the fiscal fourth quarter compared with $225.1 million at the end of the fiscal third quarter.
Guidance
For fiscal 2023, the company expects GAAP revenues of $2.080-$2.087 billion.
The company anticipates non-GAAP revenues of $2.045-$2.052 billion.
It expects earnings of $5.05-$5.09 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 -8% due to these changes.
VGM Scores
At this time, Jack Henry has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. 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. It's no surprise Jack Henry has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Jack Henry (JKHY) Down 2% Since Last Earnings Report?
It has been about a month since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have lost about 2% 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 Q4 Earnings Beat
Jack Henry & Associates reported fourth-quarter fiscal 2022 earnings of $1.10 per share, which surpassed the Zacks Consensus Estimate by 10%. Further, the bottom line increased 6% year over year.
Revenues improved 7% year over year to $482.7 million, which surpassed the Zacks Consensus Estimate of $480.8 million.
The company’s non-GAAP revenues were $477.4 million, up 8% from the year-ago quarter.
Top-line growth was driven by increased processing, and services and support revenues. Additionally, strength across the Core, Payments, Complementary and Corporate segments drove the results.
Top Line in Detail
Services & Support: The company generated revenues of $279.7 million from the category (58% of revenues). Notably, the figure rose 7% from the year-ago quarter, owing to growth in cloud processing revenues.
However, declining deconversion fees were negatives.
Processing: The category yielded revenues of $202.9 million (42% of revenues) in the reported quarter, up 8% year over year. This can be attributed to 31.3% growth in Jack Henry's digital revenues and growing card-processing fee revenues.
Segments in Detail
Core: The company generated revenues of $151.5 million from the segment (31.4% of the total revenues), increasing 8% year over year.
Payments: The segment yielded revenues of $177.3 million (36.7% of the total revenues), increasing 5% from the year-ago quarter.
Complementary: The segment generated $140.3 million in revenues (29.1% of the total revenues), increasing 9% year over year.
Corporate & Other: The company generated revenues of $13.6 million from the segment (2.8% of the total revenues), up 22% from the prior-year quarter.
Operating Details
In fourth-quarter fiscal 2022, total operating expenses were $378.9 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 10 basis points (bps) year over year to 78.5%.
Notably, the operating margin was 22% in the reported quarter, which expanded 100 bps on a year-over-year basis.
Balance Sheet
As of Jun 30, 2022, cash and cash equivalents totaled $48.8 million, which increased from $39.8 million as of Mar 31, 2022.
Trade receivables were $348.1 million in the reported quarter, up from $222.7 million in the previous quarter.
The current and long-term debt stood at $115.1 million at the end of the fiscal fourth quarter compared with $225.1 million at the end of the fiscal third quarter.
Guidance
For fiscal 2023, the company expects GAAP revenues of $2.080-$2.087 billion.
The company anticipates non-GAAP revenues of $2.045-$2.052 billion.
It expects earnings of $5.05-$5.09 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 -8% due to these changes.
VGM Scores
At this time, Jack Henry has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. 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. It's no surprise Jack Henry has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.