JKHY Stock Forecast & Price Target

Jack Henry & Associates's stock outlook is bolstered by strong fiscal performance, evidenced by a 25.3% GAAP operating margin in F4Q25, an expansion of 190 basis points year-over-year, driven by increased deconversion fees and efficient expense management. The company reported significant growth in its Core segment, alongside robust demand for complementary offerings, resulting in 51 core wins and 47 new contracts for Financial Crimes Defender, showcasing a successful penetration into the market. Additionally, the financial stability achieved by paying down debt and the potential for 85%–100% free cash flow conversion positions Jack Henry favorably for ongoing investments and acquisitions, which could foster further growth and operational leverage.

Jack Henry & Associates is experiencing a negative outlook due to a conservative estimate of deconversion fee revenue, which is projected to decline by $8 million year-over-year, resulting in a 16 cent headwind to earnings per share. The company faces significant risks including intensified competition, margin pressures from the migration of its payment platform, and ongoing consolidation within the banking industry, which could adversely affect its client base. Furthermore, the potential for a prolonged global recession and reduced spending on bank technology raises concerns over Jack Henry's organic growth prospects, leading to a heightened risk of underperformance in its stock.