Results: Jack Henry & Associates, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in Jack Henry & Associates, Inc. (NASDAQ:JKHY) had a good week, as its shares rose 7.8% to close at US$176 following the release of its second-quarter results. It looks like a credible result overall - although revenues of US$546m were in line with what the analysts predicted, Jack Henry & Associates surprised by delivering a statutory profit of US$1.26 per share, a notable 10% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Jack Henry & Associates after the latest results.

See our latest analysis for Jack Henry & Associates

Taking into account the latest results, the consensus forecast from Jack Henry & Associates' 15 analysts is for revenues of US$2.22b in 2024. This reflects a satisfactory 2.8% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$5.11, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$2.22b and earnings per share (EPS) of US$5.02 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$178, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Jack Henry & Associates at US$198 per share, while the most bearish prices it at US$157. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Jack Henry & Associates'historical trends, as the 5.6% annualised revenue growth to the end of 2024 is roughly in line with the 7.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.7% per year. So it's pretty clear that Jack Henry & Associates is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$178, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Jack Henry & Associates. Long-term earnings power is much more important than next year's profits. We have forecasts for Jack Henry & Associates going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Jack Henry & Associates' balance sheet, and whether we think Jack Henry & Associates is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.