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Jack Henry (JKHY) Q4 Earnings Top Estimates, Revenues Up Y/Y
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Jack Henry & Associates, Inc. (JKHY - Free Report) reported fourth-quarter fiscal 2020 earnings of 80 cents per share, which surpassed the Zacks Consensus Estimate by 2.6%. Further, the bottom line increased 1.3% from the year-ago quarter.
Revenues improved 4.3% year over year to $410.5 million. However, the top line missed the Zacks Consensus Estimate of $410.9 million.
Further, the company’s non-GAAP revenues were $399.8 million, up 4% on a year over year basis.
The top line was driven by solid performance of Core, Payments and Complementary segments during the reported quarter. Additionally, accelerating processing, and services and support revenues contributed to the results.
However, headwinds related to coronavirus pandemic especially in the Payments segment were concerns. Moreover, sluggish Corporate segment was an overhang.
Notably, Jack Henry stock has returned 35.7% in the year-to-date period, compared with the industry’s rally of 34.9%.
Top-Line in Detail
Services & Support: The company generated revenues of $247.2 million from this category (60% of revenues). Notably, the figure improved 3% from the year-ago quarter, courtesy of increase in data processing and hosting fees. Further, spike in deconversion fees contributed to the performance.
Processing: This category yielded revenues worth $163.3 million (40% of revenues) during the reported quarter, up 7% year over year. This can be attributed to growth in card processing transaction volumes and hike in associated fee revenues. Further, Paycheck Protection Program lending line remained a major positive and surge in its related transaction and digital revenues drove processing revenues.
Segments in Detail
Core: The company generated revenues of $141.5 million from this segment (34.5% of total revenues), improving4% year over year.
Payments: This segment yielded revenues of$145.5million (35.4% of total revenues), increasing3% from the year-ago quarter.
Complementary: This segment generated $114 million revenues (27.8% of total revenues), increasing 9% year over year.
Corporate & Other: The company generated revenues of $9.5 million from this segment (2.3% of total revenues), down12% from the prior-year quarter.
Jack Henry Associates, Inc. Price, Consensus and EPS Surprise
In fourth-quarter fiscal 2020, total operating expenses were $333.7million, reflecting an improvement of 6% year over year. This can primarily be attributed to rising headcounts, which led to an increase in personnel costs and salaries, and rising costs related to the company’s card processing platform.
As a percentage of revenues, the figure expanded 150 basis points (bps) year over year to 81.3%. This was due to expansion of 100 bps year over year in the research and development expenses, which as a percentage of revenues was7%.
Selling, general and administrative expenses remained flat year over year at 12% as a percentage of revenues.
Notably, operating margin was 19%, contracting 100 bps year over year. This can primarily be attributed to disruptions caused by coronavirus pandemic.
Balance Sheet
As of Mar 31, 2020, cash and cash equivalents totaled $213.3 million, which improved from $109.5 million as of Mar 31, 2020.
Trade receivables were nearly $300.9 million, up from $212.1 million in the previous quarter.
Further, current and long-term debt stood at $323,000 at the end of the fiscal fourth quarter compared with $55.2 million at the end of the fiscal third quarter.
Guidance
For fiscal year 2021, the company projects GAAP revenues between $1.75 billion and $1.77 billion. The Zacks Consensus Estimate for the same is projected at $1.78 billion.
The company anticipates non-GAAP revenues to exhibit year-over-year growth between 5.5% and 6.5%.
Further, earnings per share for fiscal 2021 are expected within the range of $3.70-$3.75. The Zacks Consensus Estimate for the same is pegged at $3.96 per share.
Long-term earnings growth rate for Blackbaud, Autodesk and Cadence is pegged at 7.59%, 39.6% and 13.74%, respectively.
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Jack Henry (JKHY) Q4 Earnings Top Estimates, Revenues Up Y/Y
Jack Henry & Associates, Inc. (JKHY - Free Report) reported fourth-quarter fiscal 2020 earnings of 80 cents per share, which surpassed the Zacks Consensus Estimate by 2.6%. Further, the bottom line increased 1.3% from the year-ago quarter.
Revenues improved 4.3% year over year to $410.5 million. However, the top line missed the Zacks Consensus Estimate of $410.9 million.
Further, the company’s non-GAAP revenues were $399.8 million, up 4% on a year over year basis.
The top line was driven by solid performance of Core, Payments and Complementary segments during the reported quarter. Additionally, accelerating processing, and services and support revenues contributed to the results.
However, headwinds related to coronavirus pandemic especially in the Payments segment were concerns. Moreover, sluggish Corporate segment was an overhang.
Notably, Jack Henry stock has returned 35.7% in the year-to-date period, compared with the industry’s rally of 34.9%.
Top-Line in Detail
Services & Support: The company generated revenues of $247.2 million from this category (60% of revenues). Notably, the figure improved 3% from the year-ago quarter, courtesy of increase in data processing and hosting fees. Further, spike in deconversion fees contributed to the performance.
Processing: This category yielded revenues worth $163.3 million (40% of revenues) during the reported quarter, up 7% year over year. This can be attributed to growth in card processing transaction volumes and hike in associated fee revenues. Further, Paycheck Protection Program lending line remained a major positive and surge in its related transaction and digital revenues drove processing revenues.
Segments in Detail
Core: The company generated revenues of $141.5 million from this segment (34.5% of total revenues), improving4% year over year.
Payments: This segment yielded revenues of$145.5million (35.4% of total revenues), increasing3% from the year-ago quarter.
Complementary: This segment generated $114 million revenues (27.8% of total revenues), increasing 9% year over year.
Corporate & Other: The company generated revenues of $9.5 million from this segment (2.3% of total revenues), down12% from the prior-year quarter.
Jack Henry Associates, Inc. Price, Consensus and EPS Surprise
Jack Henry Associates, Inc. price-consensus-eps-surprise-chart | Jack Henry Associates, Inc. Quote
Operating Details
In fourth-quarter fiscal 2020, total operating expenses were $333.7million, reflecting an improvement of 6% year over year. This can primarily be attributed to rising headcounts, which led to an increase in personnel costs and salaries, and rising costs related to the company’s card processing platform.
As a percentage of revenues, the figure expanded 150 basis points (bps) year over year to 81.3%. This was due to expansion of 100 bps year over year in the research and development expenses, which as a percentage of revenues was7%.
Selling, general and administrative expenses remained flat year over year at 12% as a percentage of revenues.
Notably, operating margin was 19%, contracting 100 bps year over year. This can primarily be attributed to disruptions caused by coronavirus pandemic.
Balance Sheet
As of Mar 31, 2020, cash and cash equivalents totaled $213.3 million, which improved from $109.5 million as of Mar 31, 2020.
Trade receivables were nearly $300.9 million, up from $212.1 million in the previous quarter.
Further, current and long-term debt stood at $323,000 at the end of the fiscal fourth quarter compared with $55.2 million at the end of the fiscal third quarter.
Guidance
For fiscal year 2021, the company projects GAAP revenues between $1.75 billion and $1.77 billion. The Zacks Consensus Estimate for the same is projected at $1.78 billion.
The company anticipates non-GAAP revenues to exhibit year-over-year growth between 5.5% and 6.5%.
Further, earnings per share for fiscal 2021 are expected within the range of $3.70-$3.75. The Zacks Consensus Estimate for the same is pegged at $3.96 per share.
Zacks Rank & Key Picks
Jack Henry currently has a Zacks Rank #4 (Sell).
Blackbaud (BLKB - Free Report) , Autodesk (ADSK - Free Report) and Cadence Design Systems (CDNS - Free Report) are some better-ranked stocks worth considering in the broader computer and technology sector. While Blackbaud flaunts a Zacks Rank #1 (Strong Buy), Autodesk and Cadence carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Blackbaud, Autodesk and Cadence is pegged at 7.59%, 39.6% and 13.74%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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