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Category: Stock Market and Jacobs Engineering
Date: 26 November 2019 Stock Price: $90.75 We take a look at the 4th quarter earnings for their 2019 fiscal year of Jacobs Engineering a specialist engineering and manufacturing company that provides services to both government and the private sector
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About Jacobs Engineering
At Jacobs, we're challenging today to reinvent tomorrow by solving the world's most critical problems for thriving cities, resilient environments, mission-critical outcomes, operational advancement, scientific discovery and cutting-edge manufacturing, turning abstract ideas into realities that transform the world for good. With $13 billion in revenue and a talent force of approximately 52,000, Jacobs provides a full spectrum of professional services including consulting, technical, scientific and project delivery for the government and private sectors.
Overview of Jacobs Engineering's 4th quarter 2019 earnings report
The numbers we are interested in (for the quarter):
- Total revenues: $3.39 billion (up from $2.911 billion from the same quarter of the previous year)
- Total revenue increased by 16.5% over the last 12 months
- Direct cost of contracts: $2.72 billion (up from $2.385 billion for the same quarter of the previous year)
- Direct cost of contracts increased by 14% over the last 12 months
- Net income: $142.324 million (up from a loss -$37.5 million for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 96.6 million (up from 93.8 million for the same quarter of the previous year)
- Diluted net income per share: $1.04 (up from a loss of -$0.26 for the same quarter of the previous year)
- Cash and cash equivalents: $631.068 million
- Cash and cash equivalents per share: $6.53
- Cash and cash equivalents makes up 5.2% of Jacobs Engineering's current market capital
- Cash and cash equivalents makes up 7.2% of Jacobs Engineering's total assets
- Receivables and contract assets: $2.840 billion
- Receivables and contract assets makes up 24.7% of Jacobs Engineering's total assets
- Total shareholders' equity of Jacobs Engineering : $5.768 billion
- Shareholders' equity per share: $59.71
- Jacobs Engineering is trading at 1.51 times its stockholders equity per share which is just outside the expected range of between 2 and 4 times that most firms tend to trade at
Palo Alto's management commentary on their 4th quarter 2019 earnings report
DALLAS, Nov. 25, 2019 /PRNewswire/ -- Jacobs Engineering Group Inc. (NYSE: JEC) today announced its financial results for the fiscal fourth quarter and fiscal year ended September 27, 2019.
"Our team has demonstrated strong execution by exceeding our three-year revenue and operating profit guidance that was established at our inaugural investor day in 2016. Our transformed portfolio is well aligned to major secular growth trends such as environmental resiliency, IT/OT convergence and national security. Today we embrace a future of infinite possibilities with a new brand that reflects who we are and where we are going. We are adopting a new tagline - Challenging today. Reinventing tomorrow. - to capture the shared passion, pride and drive of our people as we work with our clients and partners to solve some of the world's biggest challenges," said Chair and CEO Steve Demetriou. "And as we do so, our values continue to drive our behaviors, relationships and outcomes: We do things right. We challenge the accepted. We aim higher. We live inclusion."
"Our team has demonstrated strong execution by exceeding our three-year revenue and operating profit guidance that was established at our inaugural investor day in 2016. Our transformed portfolio is well aligned to major secular growth trends such as environmental resiliency, IT/OT convergence and national security. Today we embrace a future of infinite possibilities with a new brand that reflects who we are and where we are going. We are adopting a new tagline - Challenging today. Reinventing tomorrow. - to capture the shared passion, pride and drive of our people as we work with our clients and partners to solve some of the world's biggest challenges," said Chair and CEO Steve Demetriou. "And as we do so, our values continue to drive our behaviors, relationships and outcomes: We do things right. We challenge the accepted. We aim higher. We live inclusion."
Jacobs' CFO, Kevin Berryman, added, "It's clear the strategic actions we have taken are resulting in a high-performance culture with strong execution discipline. This is demonstrated by our fiscal 2019 financial results, including solid operating profit growth and achieving results at the high end of our original guidance, leading to double-digit adjusted EBITDA growth. During the fourth quarter, we opportunistically initiated a $250 million accelerated share repurchase program, culminating in more than $850 million in fiscal 2019 buy-backs. We are initiating a fiscal 2020 outlook of $1.05 billion to $1.15 billion in adjusted EBITDA and are off to a strong start in achieving our 2021 revenue and profitability targets."
Jacobs Engineering (NYSE: JEC) stock price history
The image below shows the stock price of Jacobs Engineering (NYSE: JEC) over the last 5 years. And its been a pretty good time for Jacobs Engineering stockholders over the last 5 years. 5 years ago the stock was trading at $46.50 and its currently trading at $90.75. That's a very strong return of 95.2% provided to Jacobs Engineering stockholders over the last 5 years Jacobs Engineering is trading at a lot closer to its 52 week high of $98.08 than it is to its 52 week low of $55.17, which to us is a clear indication that the short term sentiment and momentum of Jacobs Engineering stock is very positive.
Recent coverage of Jacobs Engineering
The extract below covers the latest earnings report of Jacobs Engineering as obtained from TheStreet.com
Jacobs Engineering (JEC - Get Report) premarket Monday reported better-than-expected fiscal-fourth-quarter earnings, sending the stock as high as $95.66 at the open, shy of its monthly risky level at $95.74. The stock then reversed direction and traded as low as $91.71, above its quarterly value level at $89.76. My call is to countertrade the stock: Buy weakness to $89.76 and sell strength to $95.74.
The stock is struggling technically because it suffered a daily downside key reversal on Nov. 7. A key reversal is confirmed when a stock sets a new high, then closes below the prior day's low. JEC traded as high as $98.08 on Nov. 7, then closed that day at $95.71, below the Nov. 6 low of $96.32.
Read the full article here
Jacobs Engineering (JEC - Get Report) premarket Monday reported better-than-expected fiscal-fourth-quarter earnings, sending the stock as high as $95.66 at the open, shy of its monthly risky level at $95.74. The stock then reversed direction and traded as low as $91.71, above its quarterly value level at $89.76. My call is to countertrade the stock: Buy weakness to $89.76 and sell strength to $95.74.
The stock is struggling technically because it suffered a daily downside key reversal on Nov. 7. A key reversal is confirmed when a stock sets a new high, then closes below the prior day's low. JEC traded as high as $98.08 on Nov. 7, then closed that day at $95.71, below the Nov. 6 low of $96.32.
Read the full article here
Jacobs Engineering (NYSE: JEC) latest stock valuation
So based on Jacobs Engineering's latest earnings report and the guidance provided what do we value their stock at? Based on their earnings report and the guidance provided by Jacobs Engineering our valuation model sets a target price or target (full value) price for Jacobs Engineering at $85.40 a stock. We therefore believe the stock of Jacobs Engineering's is slightly overvalued and expect it to pull back from current levels to more reasonable valuation levels closer to our target price.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which is $85.40 in this case. A good entry point into Jacobs Engineering would therefore be at $76.90 or below.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which is $85.40 in this case. A good entry point into Jacobs Engineering would therefore be at $76.90 or below.
Next earnings release of Jacobs Engineering
It is expected that Jacobs Engineering will release their 1st quarter 2020 earnings report in late February 2020