One-glance verdict
Undervalued
$249.11 our estimate vs market $128.23
Wall Street consensus: $188.00 (-24.5% lower than our fair-value estimate)
49% below our estimate, below the bear case
Fundamentals snapshot
Jack Henry & Associates, Inc.
JKHY · NMS · Technology · Information Technology Services
Current price
$128.23
52-week range
$124.63 - $193.39
Market cap
$9.11B
Balance sheet
Healthy
54.49x Strong cushion
Net debt $116.01M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 5.9% last year.
- Reward Returns 24.9% on equity, ahead of 60% of its peers.
- Risk Forward P/E (18.1x) is higher than trailing (17.9x) - earnings are expected to drop.
- Risk Net debt grew 11.5% over 3 years.
What this company does
Jack Henry & Associates, Inc.
Jack Henry & Associates provides the essential software that thousands of smaller banks and credit unions use to manage customer accounts, loans, and payments. The company makes most of its money from long-term contracts for these services, which generates predictable recurring revenue (income that comes in regularly, like a subscription). This business model is stable because it is very difficult and expensive for a bank to switch its core operating system to a competitor.
How the company got here
Jack Henry & Associates was started in 1976 by two individuals, Jack Henry and Jerry Hall, in Monett, Missouri. Their goal was to help smaller community banks get access to the same kind of computer technology that larger banks were using to manage their operations. They began by creating systems to automate the basic tasks of a bank, like keeping track of customer accounts and transactions. The company grew steadily over the years by focusing on the needs of these smaller financial institutions and eventually became a publicly traded company on the NASDAQ stock exchange.
What it actually does
Think of Jack Henry & Associates as the technology provider that works behind the scenes at many local banks and credit unions. They don't serve consumers directly, but they provide the essential software and services that these financial institutions need to operate in the modern world. This includes everything from the core system that keeps track of your account balance to the app you use for mobile banking and the systems that process your debit card payments. Essentially, they help your local bank or credit union compete with the big national banks by giving them access to sophisticated technology.
Core
This is the foundational part of Jack Henry's business. The Core segment provides the central computer systems, known as core information processing platforms, that banks and credit unions use to manage their most basic and essential functions. This includes things like processing deposits and loans, maintaining customer account information, and keeping the bank's main financial records (the general ledger). Financial institutions pay Jack Henry for these critical systems, which are the backbone of their daily operations. This segment is a major part of the company's business, providing the essential infrastructure for its clients.
Payments
This part of the company focuses on everything related to moving money. The Payments segment offers services that allow you to use your debit and credit cards, pay bills online, and deposit checks with your phone's camera (a service called remote deposit capture). They also handle the processing of electronic payments between banks (known as ACH) and provide security services to protect against fraud. Banks and credit unions pay Jack Henry for these services so they can offer modern and secure payment options to their customers. This is a significant and growing part of Jack Henry's business as more banking becomes digital.
Complementary
This segment offers a wide range of additional software and services that build upon the Core and Payments offerings. This includes things like the mobile banking app you use, online account opening, and tools that help banks detect and prevent financial crimes like money laundering. Essentially, these are the extra features and digital tools that make banking more convenient and secure for customers. Financial institutions purchase these services to enhance their offerings and stay competitive. This segment represents a key way Jack Henry grows by selling more services to its existing customers.
Corporate and Other
This is the smallest segment of Jack Henry's business. It primarily includes the sale of computer hardware and other miscellaneous products and services that support their main offerings. For example, a bank might purchase specialized hardware from Jack Henry to run the software provided by the other segments. While not the main focus of the company, it provides necessary components to deliver a complete technology solution to their clients.
What management is betting on now
Jack Henry's leadership is focused on creating a single, unified technology system for banks and credit unions, often referred to as an open banking platform. The idea is to make it easier for their clients to adopt new technologies and work with other financial technology companies (fintechs). They are also investing heavily in digital banking tools, data analytics, and artificial intelligence to help their clients operate more efficiently and better serve their customers. A key part of their strategy is to continue expanding the services they offer to help community banks and credit unions compete with larger financial institutions, especially in areas like serving small and medium-sized businesses.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$208.03M
FY2025 Q1
$104.09M
FY2025 Q2
$72.98M
FY2025 Q3
$96.13M
FY2025 Q4
$314.94M
FY2026 Q1
$111.71M
FY2026 Q2
$131.45M
FY2026 Q3
$169.51M
Revenue
$636.25M
Net income
$122.89M
Diluted EPS
1.71
Operating cash flow
$186.03M
Free cash flow
$169.51M
Fetching…
Sources
Revenue
$619.33M
Net income
$124.67M
Diluted EPS
1.72
Operating cash flow
$152.66M
Free cash flow
$131.45M
Fetching…
Sources
Revenue
$644.74M
Net income
$143.99M
Diluted EPS
1.97
Operating cash flow
$120.59M
Free cash flow
$111.71M
Fetching…
Sources
Revenue
$615.37M
Net income
$127.60M
Diluted EPS
1.75
Operating cash flow
$327.11M
Free cash flow
$314.94M
Fetching…
Sources
Revenue
$585.09M
Net income
$111.11M
Diluted EPS
1.52
Operating cash flow
$107.85M
Free cash flow
$96.13M
Fetching…
Sources
Revenue
$573.85M
Net income
$97.84M
Diluted EPS
1.34
Operating cash flow
$89.65M
Free cash flow
$72.98M
Fetching…
Sources
Revenue
$600.98M
Net income
$119.19M
Diluted EPS
1.63
Operating cash flow
$116.90M
Free cash flow
$104.09M
Fetching…
Sources
Revenue
$559.91M
Net income
$101.07M
Diluted EPS
1.39
Operating cash flow
$231.80M
Free cash flow
$208.03M
Fetching…
Sources
Is it cheap or expensive?
Fair value $249.11 vs current price $128.23
Wall Street consensus is the average analyst price target: $188.00 (-24.5% lower than our fair-value estimate).
Our most-likely fair value is $249.11 a share — about 94.3% above today's price of $128.23, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $116.0M. Interest coverage 54.5x.
Net debt
$116.01M
Interest coverage
54.49x
Jack Henry & Associates, Inc.'s profit covers its interest bill about 54.5 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
JKHY
BASELINE
Jack Henry & Associates, Inc.
Total debt $136.59M Interest coverage 54.49x This is the baseline the peer rows are being compared against.
Total debt — Interest coverage 3.72x -93% vs JKHY Carries about 14.6x less debt cushion than JKHY.
Total debt $21.15B Interest coverage 4.50x -92% vs JKHY Carries about 12.1x less debt cushion than JKHY.
Total debt $343.90M Interest coverage 8.11x -85% vs JKHY Carries about 6.7x less debt cushion than JKHY.
Total debt $3.41B Interest coverage 8.75x -84% vs JKHY Carries about 6.2x less debt cushion than JKHY.
Total debt $23.59B Interest coverage 2.27x -96% vs JKHY Carries about 24.0x less debt cushion than JKHY.
What you should know
The case for and against JKHY
3 Rewards
3 Risks
Rewards
-
Revenue grew 5.9% last year.
-
Returns 24.9% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Forward P/E (18.1x) is higher than trailing (17.9x) - earnings are expected to drop.
-
Net debt grew 11.5% over 3 years.
-
Insider ownership is only 0.6% (peer median: 0.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
17.91x
Forward P/E
18.08x
P/B
4.28x
P/S
3.62x
EV/EBITDA
12.90x
PEG ratio
1.74x
Profitability
How much profit each dollar creates
Gross margin
44.1%
Operating margin
24.4%
Net margin
20.6%
ROE
24.9%
ROA
13.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.06x
Current ratio
1.74x
Quick ratio
1.01x
Total debt
$136.59M
Total cash
$20.57M
Growth
How the business has been compounding
Revenue TTM
$2.52B
Revenue 5Y CAGR
7.8%
EPS TTM
7.16
EPS 5Y CAGR
8.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$786.40M
Free CF TTM
$588.15M
FCF margin
23.4%
Dividend
Shareholder payout
Yield
1.9%
Payout ratio
32.8%
Last ex-div date
2026-06-01