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Jack Henry Launches PPP Loan Solution to Fight Coronavirus

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Jack Henry & Associates, Inc. (JKHY - Free Report) is making every effort to aid the financial institutions deliver enhanced customer experience on the back of its robust technology solutions amid this coronavirus-induced crisis.

The company’s latest Paycheck Protection Program (PPP) loan solution is a testament to the same.

Notably, the PPP, which was recently created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, is an extension of the Small Business Administration 7(a) loan program that allows financial institutions to provide federally-backed, forgivable loans to businesses.

Jack Henry’s latest lending solution is allowing banks and credit unions to support PPP by enabling small and medium businesses to upload the required documents and other information online securely.



Move to Benefit

We believe the company is expected to witness strong adoption of the PPP loan solution during this coronavirus pandemic, which has caused disruptions to several small businesses globally.

These disruptions, in turn, are resulting in a spike in loan applications generated by the CARES Act.

Moreover, user penetration of digital and online services is rapidly increasing due to COVID-19-induced economic shutdown. Notably, Jack Henry is enabling banks and credit unions to offer online PPP loan applications.

Further, the PPP loan solution has brought automation in conditional decision making process, which allows these financial institutions to manage surging loan requests seamlessly.

All these facilities and benefits are likely to aid these institutions to cater well to urgent funding requirements of small businesses. This, in turn, will drive Jack Henry’s momentum among banks and credit unions amid this challenging scenario.

This move will instill investor confidence in the stock.

Coming to the price performance, Jack Henry has returned 10.5% over a year, compared with the industry’s rally of 8.9%.


Wrapping Up

The latest move depicts the company’s strong commitment toward the financial institutions. The PPP loan solutions are helping the company to cater well to the dynamic requirements of banks during this pandemic situation.

This, in turn, is likely to expand Jack Henry’s client base, which will drive the top line in the near term. Above 700 clients are already engaged in the evaluation of the new solution.

Moreover, the latest move bodes well for the company’s strong efforts toward expansion of solutions portfolio through organic initiatives. This will continue to aid its market share growth.

Zacks Rank & Other Stocks to Consider

Currently, Jack Henry sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader technology sector include Avid Technology, Inc. , CyberOptics Corporation and CACI International, Inc. (CACI - Free Report) . All the three stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Avid Technology, CyberOptics and CACI is currently pegged at 20%, 12% and 11.13%, respectively.

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