JKHY - Jack Henry & Associates: Steady Excellence Trading At A Fair Valuation
2024-07-17 12:06:48 ET
Summary
- Jack Henry & Associates provides core financial services to U.S. banks and credit unions and sports a wide economic moat.
- The firm's enterprise economics are robust, being characterized by solid returns, margins and very low levels of corporate debt.
- Unfortunately, the current valuation is a little pricey for my liking, with a fair valuation being present at the current time given a base-case scenario.
- Jack Henry also faces real risks from a cyclical industry, competitive pressures and the potential for a changing market landscape.
- Hold rating issued.
Investment Thesis
Jack Henry & Associates ( JKHY ) is a wonderful financial services business that provides core banking solutions to banks and credit unions, primarily in the U.S.
The firm has a robust and wide economic moat built around their core transaction processing business. Underpinning their sound business fundamentals are a set of truly outstanding enterprise economics, which further support the hypothesis that the firm is a run by a solid management team.
The current valuation, however, is a little pricey for my liking, with a base-case scenario suggesting a fair-valuation at present time....
Jack Henry & Associates: Steady Excellence Trading At A Fair Valuation