This financial software company just announced the acquisition of Agiletics, Inc., a Florida-based provider of sophisticated escrow, investment, and liquidity management solutions for commercial bank customers. The company beat Wall Street’s EPS estimates by $0.15 last quarter.
Jack Henry & Associates (JKHY)
From Pivotal Point
Both culturally and geographically, Jack Henry & Associates (JKHY) of Monett, Missouri, is far removed from Silicon Valley. Yet, the thriving software business serves 11,300 regional banks and credit unions.
Jack Henry managers understand their bank and credit union clients are under attack. They know bank customers need to feel like their banking needs are not stuck in the past. This means implementing the latest automation processes and value-added features.
Jack Henry customers can ask Alexa to check their account balances, transfer funds, make payments, get loan payoff information, cancel payment cards and more through Amazon’s Alexa. Cloud communications company Twilio sends text receipts for these transactions. Their software allows customers to use their smartphones to move money between accounts, pay bills and even deposit checks by snapping a photograph. In the future, they will be able to perform many of these functions by voice.
Jack Henry even has an Alexa skill that brings voice-activated personal banking to Amazon Echo-enabled devices.
Revenues have been on a steady 6% to 9% trek higher. Fiscal 2018 sales reached $1.54 billion. Profits accelerated to $376.7 million, up 52% over 2017 levels. Jack Henry is a trusted fintech in a world of attackers. Banks and credit unions need its services more than ever.
The shares are up 36.1% this year, and the market capitalization has reached $12.3 billion. However, the stock is still attractive even at 35.5 times forward earnings.
Jon Markman, Pivotal Point, issues@e.moneyandmarkets.com, 1-800-291-8545, September 24, 2018