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Here's Why Jabil (JBL) is a Solid Investment Proposition Now
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Shares of Jabil Inc. (JBL - Free Report) have surged 70.2% over the past year, driven by healthy revenues on the back of a flexible business model and a quick time-to-market schedule to meet clients’ evolving needs. Earnings estimates for the current fiscal year have increased 7.7% over the past year, while that for the next fiscal year rose 12.7%, implying solid inherent growth potential. With healthy fundamentals, this Zacks Rank #2 (Buy) electronics solutions provider appears to be a solid investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Growth Drivers
Headquartered in St. Petersburg, FL, Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, production, product management and after-market services to customers catering to aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries.
Jabil’s focus on end-market and product diversification is a key catalyst. The company’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. This initiative should position it well on the growth trajectory. The diversification will increase the reliability of the company’s earnings and revenues, thereby driving returns for investors in the long haul.
In addition, Jabil’s top-line growth is expected to benefit from strength in healthcare, cloud, retail and industrial. The company is likely to gain from the rapid adoption of 5G wireless and cloud computing in the long haul. It is benefiting from solid demand in key end markets together with excellent operational execution and skillful management of supply chain dynamics.
A large-scale portfolio of business sectors offers Jabil a high degree of resiliency during macroeconomic and geopolitical disruptions. The company is witnessing a resilient demand trend and anticipates substantial secular growth in electric vehicles, healthcare, renewable energy infrastructure, 5G and cloud. Its automotive industry is poised to benefit as the transformation to EV accelerates.
With more than 250,000 employees across 100 locations in 30 countries, Jabil is likely to benefit from secular growth drivers with strong margin and cash flow dynamics. Moreover, its unmatched end-market experience, technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise have put it in good stead. An extensive global footprint is further strengthened by a centralized procurement process, which, coupled with a single Enterprise Resource Planning system, aids customers with end-to-end supply chain visibility.
Jabil has a VGM Score of A. The stock delivered an earnings surprise of 5.5%, on average, in the trailing four quarters and has a long-term earnings growth expectation of 12%.
Other Key Picks
Model N, Inc. , sporting a Zacks Rank #1, has delivered an earnings surprise of 21.3% in the trailing four quarters.
San Mateo, CA-based Model N provides revenue management solutions for life sciences and technology companies, including applications for configure, price, quote, rebates management and regulatory compliance. Model N has significant growth opportunities in the revenue management market, as it continues to replace legacy processes that were labor intensive, error prone, inflexible and costly.
Akamai Technologies, Inc. (AKAM - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 4.9%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 10%.
Akamai is a global provider of content delivery network and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
T-Mobile US, Inc. (TMUS - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 8.8% in the last reported quarter. It has a VGM Score of B.
Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. The company offers services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile, through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers.
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Here's Why Jabil (JBL) is a Solid Investment Proposition Now
Shares of Jabil Inc. (JBL - Free Report) have surged 70.2% over the past year, driven by healthy revenues on the back of a flexible business model and a quick time-to-market schedule to meet clients’ evolving needs. Earnings estimates for the current fiscal year have increased 7.7% over the past year, while that for the next fiscal year rose 12.7%, implying solid inherent growth potential. With healthy fundamentals, this Zacks Rank #2 (Buy) electronics solutions provider appears to be a solid investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Growth Drivers
Headquartered in St. Petersburg, FL, Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, production, product management and after-market services to customers catering to aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries.
Jabil’s focus on end-market and product diversification is a key catalyst. The company’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. This initiative should position it well on the growth trajectory. The diversification will increase the reliability of the company’s earnings and revenues, thereby driving returns for investors in the long haul.
In addition, Jabil’s top-line growth is expected to benefit from strength in healthcare, cloud, retail and industrial. The company is likely to gain from the rapid adoption of 5G wireless and cloud computing in the long haul. It is benefiting from solid demand in key end markets together with excellent operational execution and skillful management of supply chain dynamics.
A large-scale portfolio of business sectors offers Jabil a high degree of resiliency during macroeconomic and geopolitical disruptions. The company is witnessing a resilient demand trend and anticipates substantial secular growth in electric vehicles, healthcare, renewable energy infrastructure, 5G and cloud. Its automotive industry is poised to benefit as the transformation to EV accelerates.
With more than 250,000 employees across 100 locations in 30 countries, Jabil is likely to benefit from secular growth drivers with strong margin and cash flow dynamics. Moreover, its unmatched end-market experience, technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise have put it in good stead. An extensive global footprint is further strengthened by a centralized procurement process, which, coupled with a single Enterprise Resource Planning system, aids customers with end-to-end supply chain visibility.
Jabil has a VGM Score of A. The stock delivered an earnings surprise of 5.5%, on average, in the trailing four quarters and has a long-term earnings growth expectation of 12%.
Other Key Picks
Model N, Inc. , sporting a Zacks Rank #1, has delivered an earnings surprise of 21.3% in the trailing four quarters.
San Mateo, CA-based Model N provides revenue management solutions for life sciences and technology companies, including applications for configure, price, quote, rebates management and regulatory compliance. Model N has significant growth opportunities in the revenue management market, as it continues to replace legacy processes that were labor intensive, error prone, inflexible and costly.
Akamai Technologies, Inc. (AKAM - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 4.9%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 10%.
Akamai is a global provider of content delivery network and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
T-Mobile US, Inc. (TMUS - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 8.8% in the last reported quarter. It has a VGM Score of B.
Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. The company offers services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile, through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers.