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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
JKHY — frequently asked questions
Is Jack Henry & Associates, Inc. overvalued?
In our latest published analysis dated 2026-09-20, JKHY looks meaningfully undervalued. The price recorded at analysis is 155 USD versus our fair value of 184 USD; the high endpoint is presented separately as potential value of 255 USD. That implies roughly 18.6% upside to fair value at that date.
Our latest published report, analyzed 2026-09-20, gives JKHY a fair value of 184 USD and a potential value of 255 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for Jack Henry & Associates, Inc.'s archetype; it is a dated research output, not a live price.
Should I buy JKHY now?
Our latest published rating for JKHY, analyzed 2026-09-20, is Buy. Jack Henry & Associates, Inc. looks meaningfully undervalued at the analysis-date price of 155 USD versus fair value of 184 USD; potential value is 255 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for JKHY?
The dedicated bear-case section in our report analyzed 2026-09-20 documents Jack Henry & Associates, Inc.'s material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is JKHY's rating?
Our latest published rating for JKHY, analyzed 2026-09-20, is Buy, with a published moat assessment of 9/10 (Wide). It reflects our fair value of 184 USD, the potential value of 255 USD, and the price recorded at analysis (155 USD).
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§1 Краткое резюмеEN
Ответ за 30 секундBuy
Цена и стоимость
Цена
$154.85
Справедливая стоимость
$183.66
Потенциальная стоимость
$254.92
На дату
2026-09-18
Почему сценарий может сработать
Accelerated cross-selling of payments processing ($936,006,000 in FY2026) and complementary digital banking modules ($752,214,000), combined with over 20 new AI capability launches and replacement core win momentum targeting 58 to 65 institutions, driving non-GAAP revenue growth toward the top of the 6.3% to 7.3% guidance range and expanding operating margins toward 26.0%.
We rate Jack Henry & Associates Buy with a Fair value of $183.66, offering 18.61% upside from the analysis date price of $154.85, supported by mission-critical core banking software and expanding payments processing.
We assign Jack Henry & Associates a Buy rating. For an ordinary investor, this indicates that the company offers an attractive risk-adjusted total return profile, supported by defensive recurring cash flows and compounding earnings power across community financial institutions.
As of September 18, 2026, Jack Henry traded at $154.85 per share. This price represents an 18.61% discount to our Fair value estimate of $183.66 and stands well below our Potential value estimate of $254.92, which reflects extended cross-selling adoption and multi-product margin expansion.
The primary risk that would challenge this constructive outlook is an acceleration in community bank mergers and acquisitions that terminates client charters, driving deconversion fees well above the guided $23.0M while eroding the recurring core revenue base ($768,452,000 in FY2026). If this risk materializes, investors would observe core account attrition rates rising above 1.5% and deconversion revenue becoming an increasingly volatile portion of quarterly earnings.5,8
The principal operational driver supporting our thesis is the expansion of digital payments ($936,006,000 in FY2026) and complementary software modules ($752,214,000 in FY2026), which together accounted for 66.4% of total revenue. By cross-selling digital banking, fraud detection, and new artificial intelligence tools to its deeply entrenched core customer base, Jack Henry can maintain 5.5% to 6.5% consolidated GAAP revenue growth, achieve 20 to 40 basis points of annual operating margin expansion, and convert 85% to 100% of earnings into free cash flow, driving steady per-share equity value creation.5,8
Mission-Critical Switching Costs in Core Banking
Jack Henry's core processing platforms anchor $768,452,000 in recurring revenue, where high migration risks and operational integration yield customer retention rates above 95%.8
Payments and Complementary Cross-Selling Momentum
Payments ($936,006,000 in FY2026) and Complementary solutions ($752,214,000) represent two-thirds of sales, driving organic non-GAAP growth guided at 6.3% to 7.3%.5,8
With FY2026 free cash flow of $694,857,000 on CapEx of $67,103,000 and modest debt of $77,821,000, Jack Henry converts 85% to 100% of net income to free cash flow to fund disciplined share buybacks.4,5,6,7
Рекомендация дома
Buy: Jack Henry combines mission-critical core banking software switching costs and expanding digital payments processing to deliver resilient mid-single-digit compounding and strong cash flow generation.
Обзор компании
JACK HENRY & ASSOCIATES, INC. provides products and services primarily to community and regional banks and credit unions (see "Its Industry" below):
The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate Services (formerly “Corporate and Other”). The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized accountholder information. The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate Services. Prior to the third quarter of fiscal 2026, Corporate Services was referred to as Corporate and Other.
§2 Медвежий сценарийEN
Under a stressed operating environment where community bank M&A eliminates client charters and persistent technology costs compress operating margins to 22.0%, Jack Henry's capital-light model and negligible leverage provide substantial balance-sheet defense. With total debt of only $77,821,000, representing a 0.71% debt weight, and robust free cash flow generation of $694,857,000 on capex of $67,103,000,, the company faces zero solvency strain. Solvency buffers ensure that even if top-line revenue growth drops to 1.5% and multiples derate toward peer parity, operating cash flow ($761,960,000 in FY2026) remains fully sufficient to cover ongoing capital investments and dividend commitments.
Deconversion drag exceeds guided levels as bank M&A accelerates5
Core revenue growth decelerates due to fewer available credit union opportunities5
Operating margins contract as Project Glasswing and AI compute costs persist5
Downside scenario where heightened community bank consolidation eliminates client charters, driving deconversion fees well above initial guidance and contracting recurring revenue growth, while ongoing cybersecurity and AI infrastructure outlays compress operating margins.
Как может разрушиться эта теза
Severe Community Bank Consolidation and Core Account Attrition
Accelerated M&A among community banks eliminates client charters, driving deconversion fees well beyond the guided $23M and shrinking recurring core revenue ($768,452,000 in FY2026) below historical levels as credit union opportunities dry up.5,8
FV impact
-7.2%
Revenue and EPS growth 5 points lower for five years
Trigger
Within 12 months
Сигналы раннего предупреждения для мониторинга
Пять событий, которые ослабят наш инвестиционный тезис.
Jack Henry & Associates possesses a Wide economic moat anchored by high customer switching costs and an expansive multi-product software ecosystem tailored to regional and community financial institutions. Core banking software forms the operational nervous system for financial institutions, managing mission-critical daily workflows including general ledger maintenance, loan servicing, and customer deposit accounting. Replacing an installed core platform entails immense operational risk, substantial financial capital, multi-year migration timelines, and potential regulatory scrutiny, resulting in retention rates exceeding 95% and predictable long-term contract renewals.
The defensibility of Jack Henry's moat is further reinforced by its software integration across complementary modules and transaction processing. The Payments segment ($936,006,000 in FY2026) and Complementary solutions ($752,214,000 in FY2026) collectively account for over 66% of consolidated revenues ($2,544,339,000 in FY2026). Once a financial institution embeds Jack Henry's digital banking, risk mitigation, and card processing capabilities into its daily operations, the friction and cost of unwinding the multi-product relationship become practically prohibitive.
While horizontal information processing peers like Broadridge Financial Solutions dominate Tier-1 institutional brokerage communications ($21.7B EV and 24.61% operating margin,), Jack Henry's dedicated focus on small-to-midsize community lenders shields its core client franchise from direct competitive disruption. This entrenched positioning underwrites durable economic returns, evidenced by a 23.16% ROIC that comfortably outpaces the company's 7.88% WACC.
Экономическая прибыль
Jack Henry generates an economic return on invested capital (ROIC) of 23.16%, comfortably exceeding its moderate cost of equity of 7.91% and computed WACC of 7.88%, demonstrating substantial economic value creation underpinned by entrenched switching costs.2
9/ 10
Wide
Sources of advantage
01High Switching Costs in Core Banking Platforms — Core banking software serves as the central operational backbone for deposit accounting, general ledger, and transaction clearing across community financial institutions, generating $768,452,000 in FY2026 revenue. Multi-year core migrations involve substantial implementation costs, operational disruption risk, and regulatory scrutiny, producing client retention rates exceeding 95%.Wide
02Software Integration and Multi-Product Ecosystem Breadth — Deep integration of payments processing ($936,006,000 in FY2026) and complementary digital banking modules ($752,214,000 in FY2026) creates a unified operational stack, raising total relationship switching barriers and driving over 66% of total company revenues.Wide
03
Известные угрозы для рва
Угроза
Серьёзность
Временная шкала
Митигация
Acceleration in Community Bank M&A Consolidation
medium
12 to 24 months
Contractual multi-year deconversion termination fee payments ($23M expected in FY2027) and winning new replacement charters (58 to 65 core wins guided).5
The highlighted cell is Fair value when every assumption sits at its base level ($183.66). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $636.2M after modeled capex of $67.1M, with terminal value at 63.9% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
Modal expected case where Jack Henry compounds top-line revenue within guided expectations, driven by steady core renewals, expanding payments volume, and annual operating margin expansion supported by core replacement wins within the target range.
Elevated client attrition from bank mergers or persistent infrastructure cost inflation would impair recurring revenue visibility and depress return on capital.
Качество прибыли
Earnings quality is robust, characterized by GAAP-aligned reporting, minimal reliance on capitalization of software research expenses, and high recurring contract cash flows. Operating income of $635,033,000 converts cleanly into $761,960,000 of operating cash flow, with low customer credit default risk across regulated financial institution counterparties.7
Метрики для отслеживания перед отчётом
01
Метрика:
Annual Core Platform Wins
ТекущееManagement guided 58 to 65 core wins for the fiscal year.
Почему это важно
Validates competitive share gains against legacy core banking providers and replaces accounts lost to bank consolidation.
Jack Henry exhibits exceptional cash generation characteristics. In FY2026, the company generated $761,960,000 in cash flow from operations against capital expenditures of $67,103,000, yielding free cash flow of $694,857,000. This represents a free cash flow margin of 27.3% on consolidated FY2026 revenue of $2,544,339,000. Management guided free cash flow conversion of 85% to 100% of net income for FY2027, reflecting an asset-light recurring software model with working capital stability.5,6,7
The wide spread between ROIC and cost of capital reflects deep pricing power and high customer retention in mission-critical core banking software, indicating durable economic moat strength and exceptional shareholder value creation.
Jack Henry generates an economic ROIC of 23.16%, substantially exceeding its computed WACC of 7.88% and moderate cost of equity of 7.91% by over 1,500 bps.
Revenue Expansion Driven by Payments and Complementary Solutions
Payments ($936,006,000) and Complementary solutions ($752,214,000) contributed 66.4% of consolidated FY2026 revenue ($2,544,339,000).
Последняя выручка2,5 млрд $CAGR выручки +7,0 %
Операционная маржа25,0 %Фискальных периодов: 10
Последний свободный денежный поток694,9 млн $FY2026
Чистый долг27,9 млн $FY2026
Структура отчёта о прибылях и убыткахКак масштаб бизнеса преобразуется в отчетную прибыль.
StockMarketAgent.AI
Выручка2,5 млрд $Себестоимость выручки−1,5 млрд $Валовая прибыль1,1 млрд $Операционные расходы−441,3 млн $Операционная прибыль635 млн $Внереализационные статьи и налоги−132,3 млн $Чистая прибыль502,8 млн $
Данные финансовой истории
Выручка
2 544 339 000 $
Себестоимость выручки
1 468 029 000 $
Валовая прибыль
1 076 310 000 $
Операционные расходы
441 277 000 $
Операционная прибыль
635 033 000 $
Внереализационные статьи и налоги
-132 257 000 $
Чистая прибыль
502 776 000 $
Обзор балансаКак представлены и профинансированы заявленные активы за выбранный период.
StockMarketAgent.AI
Структура активовИсточники финансирования
Активы, всего3,1 млрд $Денежные средства12,1 млн $Оборотные активы649,1 млн $Обязательства, всего1,1 млрд $Краткосрочные обязательства556,2 млн $Акционерный капитал2,1 млрд $
Данные структуры баланса
Активы, всего
3 145 711 000 $
Денежные средства
12 056 000 $
Оборотные активы
649 095 000 $
Обязательства, всего
1 093 762 000 $
Краткосрочные обязательства
556 239 000 $
Акционерный капитал
2 051 949 000 $
Мост денежных потоковКак операционный денежный поток превратился в свободный денежный поток в FY2026.
StockMarketAgent.AI
Сверка операционного денежного потока
Чистая прибыль502,8 млн $Амортизация+213,2 млн $Компенсация акциями+32,5 млн $Прочие операционные корректировки+13,5 млн $Операционный денежный поток762 млн $
Сверка денежных средств на начало и конец
Денежные средства на начало102 млн $Операционный денежный поток+762 млн $Инвестиционный денежный поток−277,7 млн $Финансовый денежный поток−574,1 млн $Денежные средства на конец12,1 млн $
762 млн $ − 67,1 млн $Свободный денежный поток 694,9 млн $
Данные моста денежных потоков
Чистая прибыль
502 776 000 $
Операционный приток
761 960 000 $
Амортизация
213 241 000 $
Компенсация акциями
32 460 000 $
Прочие операционные корректировки
13 483 000 $
Операционный денежный поток
761 960 000 $
Доступные денежные средства
863 913 000 $
Денежные средства на начало
101 953 000 $
Инвестиционный отток
277 738 000 $
Capex
67 103 000 $
Прочая инвестиционная деятельность
210 635 000 $
Финансовый отток
574 119 000 $
Чистое привлечение долга
40 000 000 $
Выкуп акций
448 173 000 $
Выплаченные дивиденды
170 405 000 $
Денежные средства на конец
12 056 000 $
Инвестиционный денежный поток
-277 738 000 $
Финансовый денежный поток
-574 119 000 $
Выручка по операционным сегментамДоля общей выручки за 2026-06-30.
2,5 млрд $Общая выручка
Выручка по операционным сегментамДоля
Payments936 млн $36,8 %+7,2 % г/г
Core768,5 млн $30,2 %+4,8 % г/г
Complementary752,2 млн $29,6 %+8,3 % г/г
Corporate Services87,7 млн $3,4 %+18,3 % г/г
Источник: SEC EDGAR · Подано 2026-08-28 · SEC EDGAR
Данные о структуре выручки: Выручка по операционным сегментам
Выручка по операционным сегментам
Выручка
Доля
г/г
Payments
936 млн $
36,8 %
7,2 %
Core
768,5 млн $
30,2 %
4,8 %
Complementary
752,2 млн $
29,6 %
8,3 %
Corporate Services
87,7 млн $
3,4 %
18,3 %
Выручка и прибыльКак масштаб бизнеса преобразуется в отчетную прибыль.
Денежные средства и долгДоступная ликвидность относительно общей задолженности.
Генерация денежных средствОперационный денежный поток в сравнении со свободным денежным потоком.
РентабельностьДинамика валовой, операционной и чистой маржи.
Финансовые данные на конкретную дату, использованные в анализе от 2026-09-20.
Jack Henry & Associates Inc. (JKHY) trades at 21.1x forward earnings against a peer median of 10.7x. Its EV/EBITDA of 15.6x compares with a peer median of 10.9x. The comparison uses 4 peers: Gartner Inc., GoDaddy Inc., Leidos Holdings Inc. and Broadridge Financial Solutions Inc., as of 2026-09-20.
§10 Отрасль и циклEN
Фаза цикла
Expansion
Industry capex-to-revenue ratio of -2.9% and capex-to-depreciation ratio of 0.35 indicate restrained capital deployment across financial technology and information processing services. Company capex remained low at $67,103,000 on $2,544,339,000 of revenue in FY2026,.7
Бычий цикл
Expanding digital transaction volumes, adoption of modern cloud-native banking modules, and community bank IT modernization budgets drive mid-to-high single-digit revenue growth with incremental operating leverage.
Медвежий цикл
Accelerating bank merger activity permanently reduces the population of independent community bank charters, while heightened regulatory compliance and AI compute infrastructure expenses squeeze operating margins.
Долгосрочные тренды
Тренд
Влияние
Примечание
Digital Banking and Real-Time Payments Modernization
positive
Community financial institutions are expanding digital payments and cloud core capabilities to compete with Tier-1 money-center banks, driving sustained adoption of payments processing ($936,006,000 in FY2026) and complementary modules ($752,214,000 in FY2026).
Community Bank M&A Consolidation
negative
Regulatory burdens and scale imperatives drive ongoing bank mergers, eliminating independent client charters and triggering contract deconversion events ($23M guided for FY2027).
Позиционирование
Jack Henry maintains a defensible leadership position as a specialized core processing and payments provider focused specifically on regional community banks and credit unions with under $50B in assets, avoiding direct head-to-head conflict with Tier-1 institutional providers while capturing high-margin cross-sell opportunities.
§11 Управление позициейEN
Размер позиции
3-5%
Consistent with a mature compounder archetype exhibiting wide moat switching costs, low financial leverage, and predictable cash flow generation.
Риск
Monitor banking consolidation trends through regulatory filings, track customer concentration, and manage sector exposure to maintain balanced portfolio risk.
Jack Henry offers durable 5% to 7% recurring revenue compounding anchored by core banking software ($768,452,000 in FY2026) and payments cross-selling ($936,006,000), with organic non-GAAP growth guided to 6.3% to 7.3%.5,8
Defensive / Quality
Buy
Prohibitive switching costs, client retention exceeding 95%, and robust balance sheet strength with total debt of just $77,821,000 insulate cash flows against macro volatility and banking sector stress.4
Total Return / Valuation
Buy
Trading at 21.05x forward P/E against consensus FY2028 EPS of $7.83, the shares offer 18.61% upside to our intrinsic Fair value of $183.66, backed by exceptional free cash flow conversion of 85% to 100%.1,4,5
§14 Итоговая рекомендацияEN
Действие
Покупать
Jack Henry & Associates warrants a Buy rating based on its entrenched switching-cost moat in regional banking software ($768,452,000 core revenue), expanding payments volume ($936,006,000), and disciplined cash generation ($694,857,000 FCF) that supports 18.61% upside to our Fair value estimate of $183.66.6,8
Investors should capitalize on current trading levels ($154.85) to accumulate shares, recognizing that temporary Q1 margin tightening from conference timing shifts and frontier model AI security investments create an attractive entry point before full-year operating leverage manifests.
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Sources
The records this analysis drew on, as they stood when it was run.
Analyst consensusData as of 2026-09-20 · Published 2026-09-20 · Provider-adjusted · cited for 1 figureCited in Точки зрения инвесторов
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
JKHY's forward P/E of 21.05x derates toward peer Broadridge's 14.09x forward P/E and peer group median of 10.69x as growth slows into mid-single digits and PEG premium of 1.89x collapses.3,4
FV impact
-3.9%
Terminal multiple 20% lower
Trigger
Within 18 months
Margin Squeeze from AI Infrastructure and Security Investments
Persistent infrastructure and cybersecurity costs for frontier model deployment (Project Glasswing) and AI compute FinOps expenses contract operating margin 300 bps below reported FY2026 operating margin of 24.96%.5,7
FV impact
0%
Operating margin 3 points lower throughout
Trigger
Within 24 months
Cost of Capital Expansion in Higher-for-Longer Environment
Rising risk-free yields above 4.94% combined with beta expansion toward the sector beta of 0.92 increases computed WACC from 7.88% and moderate Ke from 7.91% by over 100 bps.2
Targeted Distribution and Regulatory Compliance in Regional Banking
— Specialization in community banks and credit unions with under $50B in assets insulates Jack Henry from direct displacement by Tier-1 enterprise processing providers such as Broadridge, enabling durable pricing discipline and customer retention.
Moderate
Disintermediation from Alternative Payment Rails and Digital Wallets
low
24 to 36 months
Active direct integration with modern RTP and FedNow instant payment networks, offering white-label digital payment capabilities directly to community bank depositors.8
Limitation: Terminal value is 67% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Limitation: Terminal value is 64.6% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Limitation: Terminal value is 63.9% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Operating margins expand toward 26.3% as AI product monetization scales5
Upside thesis materializes as digital payments volume accelerates, client cross-sell of newly released AI tools expands complementary software attach rates, and core replacement wins exceed the guided range, driving high-single-digit revenue growth and operating margin expansion.
Capital allocation is disciplined and shareholder-friendly. Supported by a pristine balance sheet featuring $12,056,000 in cash and only $77,821,000 in total debt, Jack Henry returns excess capital through recurring dividends and opportunistic share repurchases. Share repurchases have steadily reduced diluted average shares from 73,025,000 in FY2024 to 72,043,000 in FY2026,, amplifying per-share earnings growth.
Growth is increasingly driven by higher-velocity transaction processing and module cross-selling rather than baseline core system replacements alone.
Exceptional Free Cash Flow Conversion on Capital-Light Model
High cash conversion of 85% to 100% of net income enables steady share buybacks and dividend growth with negligible debt dependency.
Operating Leverage Partially Dampened by Near-Term AI and Security Outlays
Reported operating income of $635,033,000 in FY2026 yielded a 24.96% operating margin, while management guided 20 to 40 bps of expansion for FY2027 due to Project Glasswing and AI infrastructure investments.
Underlying scale efficiencies are partially offset by deliberate technology investments that solidify cybersecurity and platform competitiveness.
Deployment of embedded AI tools (more than 20 product capabilities planned) enhances software functionality and back-office efficiency for community banks, increasing software attach rates.
Exceeding $35 million annualized
Review community bank M&A impact and assess net account attrition.
