Value
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.3 |
| P/S | 7.2 |
| EV/EBITDA | 1.9 |
| Fwd P/E | 6.0 |
| PEG | 4.5 |
| Analyst target | 5.0 |
- ▸Forward P/E: 21.3x
- ▸PEG: 2.04
JKHY · Why this verdict
Why Jack Henry & Associates (JKHY) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Jack Henry & Associates demonstrates a rare four-quarter perfect beat streak, high-quality net margins of 21%, and 25.5% upside to the analyst target at a 4-to-1 risk/reward—but a confirmed price downtrend at -2.6% per month slope and elevated leverage create timing risk for new positions despite the quality and asymmetry credentials.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Net margins of 21%, a Piotroski score of 8 out of 9, and best-in-class margins within the peer group mark this as a high-quality franchise with durable profitability characteristics. Quality breakdown | Net margins remain above 18% and the Piotroski F-Score stays at or above 7 for the next 4 consecutive reporting periods. | ↓Deteriorating |
| CounterFree cash flow running at 72% of reported net income signals that not all accounting earnings are converting to cash; sustained working capital pressure could widen this gap further and reduce financial flexibility. | ||
Four consecutive quarters of positive earnings surprises averaging 11% above consensus suggest consistent under-promising and over-delivering, a discipline that tends to support multiple expansion over time. Catalyst breakdown | The beat streak extends to 6 consecutive quarters, with each quarterly surprise remaining at least 5% above consensus. | →Stable |
| CounterA consistent beat cadence can reflect conservative guidance-setting rather than genuine business acceleration; if management raises guidance to match the beat pattern, future beats become progressively harder to deliver. | ||
With 25.5% potential upside to the analyst-derived target and a risk/reward ratio of roughly 4-to-1 in the buyer's favor, the setup offers attractive asymmetry for patient capital that can accept the current downtrend risk. Price targets | Price advances toward $163 within 12 months while the reward-to-risk ratio remains above 2-to-1 throughout. | →Stable |
| CounterA favorable upside-to-target ratio can persist without the stock moving if momentum remains negative and no near-term catalyst forces a revaluation; a wide spread to target is not itself a catalyst. | ||
Trading below the 200-day moving average with a confirmed downtrend slope of -2.6% per month, the stock carries technical timing risk regardless of the underlying business quality. Momentum breakdown | Price reclaims the 200-day moving average within 2 quarters and the monthly slope turns positive, confirming a technical recovery. | ↓Deteriorating |
| CounterAn elevated put/call ratio of 2.71 and rising on-balance volume suggest the options market and institutional buyers are positioning for a recovery; the divergence between bearish price action and accumulation signals has historically preceded trend reversals in high-quality names. | ||
Net margins of 21%, a Piotroski score of 8 out of 9, and best-in-class margins within the peer group mark this as a high-quality franchise with durable profitability characteristics.
↓DeterioratingQuality breakdown
- Expectation
- Net margins remain above 18% and the Piotroski F-Score stays at or above 7 for the next 4 consecutive reporting periods.
CounterFree cash flow running at 72% of reported net income signals that not all accounting earnings are converting to cash; sustained working capital pressure could widen this gap further and reduce financial flexibility.
Four consecutive quarters of positive earnings surprises averaging 11% above consensus suggest consistent under-promising and over-delivering, a discipline that tends to support multiple expansion over time.
→StableCatalyst breakdown
- Expectation
- The beat streak extends to 6 consecutive quarters, with each quarterly surprise remaining at least 5% above consensus.
CounterA consistent beat cadence can reflect conservative guidance-setting rather than genuine business acceleration; if management raises guidance to match the beat pattern, future beats become progressively harder to deliver.
With 25.5% potential upside to the analyst-derived target and a risk/reward ratio of roughly 4-to-1 in the buyer's favor, the setup offers attractive asymmetry for patient capital that can accept the current downtrend risk.
→StablePrice targets
- Expectation
- Price advances toward $163 within 12 months while the reward-to-risk ratio remains above 2-to-1 throughout.
CounterA favorable upside-to-target ratio can persist without the stock moving if momentum remains negative and no near-term catalyst forces a revaluation; a wide spread to target is not itself a catalyst.
Trading below the 200-day moving average with a confirmed downtrend slope of -2.6% per month, the stock carries technical timing risk regardless of the underlying business quality.
↓DeterioratingMomentum breakdown
- Expectation
- Price reclaims the 200-day moving average within 2 quarters and the monthly slope turns positive, confirming a technical recovery.
CounterAn elevated put/call ratio of 2.71 and rising on-balance volume suggest the options market and institutional buyers are positioning for a recovery; the divergence between bearish price action and accumulation signals has historically preceded trend reversals in high-quality names.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.0 |
| ROA | 8.7 |
| Gross margin | 4.8 |
| Op margin | 9.0 |
| Net margin | 9.9 |
| Current ratio | 4.5 |
| FCF quality | 5.3 |
| Moat | 7.1 |
| Piotroski F | 7.8 |
- ▸Strong margins: 20%
- ▸Earnings quality warning: 70% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
1.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 0.0 |
Momentum
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 1.7 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.0 |
- ▸Overbought (RSI 71)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 7.0 |
| erm sentiment | 5.4 |
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 3.7 |
| notable moves | 3.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.4 |
| quality rank | 7.9 |
| growth rank | 3.3 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.1 |
| support resistance | 2.6 |
| 52w position | 7.6 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.5 |
| days to cover | 5.8 |
| volatility | 4.9 |
| put call | 7.8 |
| implied vol | 5.9 |
| beta | 9.7 |
| debt equity | 9.8 |
Catalyst
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.3 |
| dividend safety | 8.5 |
- ▸Perfect beat streak: 4Q
- ▸Dividend aristocrat: 1.4% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:61d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.4<4.5
- ASYMMETRY:0.2<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.24
Upside
+2.8%
Downside
11.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.4<4.5, ASYMMETRY:0.2<1.5@spot) reinforce the read. Current asymmetry R:R is 0.24 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.4, Quality at 7.2, and Risk (lower is worse) at 7.2; the weakest are Growth at 1.9, Momentum at 3.4, and Insider at 3.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.24 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Four Quarter Perfect Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the beat streak.
- P2High Quality Margins Piotroski
Trip ifNet margin compresses below 15% for 2 consecutive quarters.
- P3Favorable 25pct Upside Asymmetry
Trip ifUpside to the analyst target falls below 10% for 4 consecutive weeks, indicating the stock has materially recovered or the target was cut.
- P4Confirmed Downtrend Timing Risk
Trip ifPrice reclaims and sustains above the 200-day moving average for 4 consecutive weeks.