Does Jackson Financial's Strong 2025 Momentum Signal More Growth Ahead?

Thinking about what to do with Jackson Financial stock? You are not alone. With a share price that recently settled at $101.62 after a 0.4% slip over the last week, some investors are watching closely to see if this is a new plateau or just the pause before another leg up. The last month saw shares gain 6.5%, and the year so far has rewarded holders with a 15.8% jump, adding to an eye-catching three-year climb of 285.2%. That is some serious momentum, especially given the broader optimism in financial markets as interest rates and inflation expectations have begun to settle down.

This steady performance is catching attention for all the right reasons. There is a growing sense among analysts that the risk perception surrounding insurance and annuity companies like Jackson Financial has improved, as recent regulatory developments have seemed to bring more predictability to the sector. At the same time, investors are rethinking what these types of financials are worth, especially when past worries start fading into the rearview mirror.

So where does Jackson stand on value? By our count, the stock scores a strong 5 out of 6 on our valuation checklist. That is five different methods indicating it is undervalued, and only one suggesting it is not quite a bargain at current levels. In the sections that follow, we will break down exactly how that score adds up and which approaches matter most. Plus, stick around until the end for an even smarter way to understand what all these numbers really mean for your investment decision.

Why Jackson Financial is lagging behind its peers

Approach 1: Jackson Financial Excess Returns Analysis

The Excess Returns valuation model looks at how much profit a company earns above the required cost of equity, focusing on how efficiently Jackson Financial turns shareholder investments into actual value. This approach works by comparing the average return on equity achieved over the past five years, here a robust 13.19%, against the compensation investors demand for taking on risk, known as the cost of equity, which stands at $16.38 per share.

For Jackson Financial, the model estimates a current book value of $140.38 per share, with a stable book value projected to rise to $178.97 per share according to two analysts’ weighted future estimates. The stable earnings per share calculated from historical returns are $23.60 per share, which results in an annual excess return of $7.21 per share. This means Jackson is consistently earning more on shareholders’ equity than what would be considered a baseline return for the risk taken.

Based on these strong metrics, the Excess Returns method calculates an intrinsic value of $297.70 per share. With the current share price at $101.62, this suggests Jackson Financial stock is trading at a remarkable 65.9% discount to its intrinsic worth. Investors are seeing a sizable gap between price and value, signaling an opportunity.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Jackson Financial.

Our Excess Returns analysis suggests Jackson Financial is undervalued by 65.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Jackson Financial Price vs Sales

The price-to-sales (P/S) ratio is a widely accepted way to value companies, particularly those with steady revenues and reliable business models such as insurance and annuity providers. This metric helps investors gauge how much they are paying for each dollar of the company's sales, making it a useful tool for profitable firms where consistent revenue growth underpins future earnings potential.

What counts as a “normal” or “fair” P/S ratio depends largely on expectations for the company’s growth, profitability, and risk profile. High-growth companies or those in stable industries may warrant a higher multiple, while uncertain outlooks or elevated risks can justify a lower one. For Jackson Financial, the current P/S ratio stands at 1.24x. By comparison, the industry average is 2.86x and the peer average is around 1.32x, placing Jackson on the lower end of the spectrum.

Simply Wall St’s Fair Ratio takes this analysis further by calculating what an appropriate P/S multiple should be by factoring in Jackson’s specific growth prospects, profit margins, size, and industry conditions. This proprietary metric, at 2.54x for Jackson, offers a clearer sense of valuation than a simple comparison against industry or peer averages because it accounts for nuances like risk and expected expansion. With the current P/S at 1.24x, which is well below both the Fair Ratio and sector benchmarks, the stock appears undervalued using this approach.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Jackson Financial Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply the story behind your numbers. It is the personal perspective you bring to your investment, linking your view of Jackson Financial's prospects to your own financial forecasts and what you see as fair value. Instead of relying solely on models or analyst averages, Narratives allow you to connect the company's business drivers and risks to your expectations for future revenue, earnings, and margins, making your investment decision both more dynamic and more personal.

Narratives are an easy and accessible tool available within the Community page of Simply Wall St, relied on by millions of investors. By turning your story and assumptions into a visual forecast, these Narratives help you clearly see when a stock's Fair Value is above or below its current price, making it easier to know when to buy, hold, or sell. The best part is that your Narrative is updated automatically as soon as new news, results, or data arrive, so you are always working from the latest and most relevant information.

For Jackson Financial, for example, some investors see strong retirement demand driving robust growth and higher profits, justifying a price target as high as $118.00, while others are more cautious about fee and regulatory risks, seeing fair value near $95.00. With Narratives, you can easily compare these viewpoints and decide which fits your perspective best.

Do you think there's more to the story for Jackson Financial? Create your own Narrative to let the Community know!

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.

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