Jacobs Solutions Inc. (J) Stock Analysis and Metrics

Sector: Industrials Industry: Engineering & Construction CIK: 0000052988

P/B 4.51

P/E 56.79

P/S 1.37

Market Cap 16.43 Bn

ROIC (Qtr) 9.09

Div Yield % 0.71

Rev 1y % (Qtr) 6.57

Total Debt (Qtr) 2.71 Bn

Debt/Equity (Qtr) 0.74

About

Jacobs Solutions Inc., commonly known as Jacobs, operates in the professional services industry and is a global technology-forward solutions company. It was founded in 1947 and is headquartered in Dallas, Texas, with its stock symbol listed on the New York Stock Exchange (NYSE) as J. Jacobs provides a wide range of professional services, including consulting, technical, engineering, scientific, and project delivery services, to clients in various industries such as government, energy, healthcare, and infrastructure. The company's services are categorized...

Jacobs Solutions Inc., commonly known as Jacobs, operates in the professional services industry and is a global technology-forward solutions company. It was founded in 1947 and is headquartered in Dallas, Texas, with its stock symbol listed on the New York Stock Exchange (NYSE) as J. Jacobs provides a wide range of professional services, including consulting, technical, engineering, scientific, and project delivery services, to clients in various industries such as government, energy, healthcare, and infrastructure. The company's services are categorized into two main lines of business (LOBs): Critical Mission Solutions (CMS) and People & Places Solutions (P&PS).

CMS provides solutions for clients in the aerospace, automotive, telecommunications, intelligence, defense, and energy sectors. The company's services in this segment focus on digital transformation, national security, defense infrastructure modernization, space exploration, and nuclear decommissioning and cleanup. Jacobs' clients in this LOB include the U.S. Department of Defense (DoD), the U.S. Intelligence Community, NASA, and private sector companies. The company's products and services in this segment include advanced engineering, research and operations, and solutions for complex, mission-essential programs and projects.

P&PS, on the other hand, provides end-to-end solutions for clients in the advanced manufacturing, cities & places, energy & environment, transportation, and water sectors. The company's services in this LOB include consulting, planning, architecture, design, engineering, infrastructure delivery, and long-term operation of facilities. Jacobs' clients in this LOB include national, state, and local governments, as well as multinational and local private sector companies. The company's products and services in this segment include solutions for urban planning, infrastructure development, and facility management.

Jacobs' revenue generation is primarily through its professional services offered in its two LOBs. Its primary customers include national, state, and local governments, as well as multinational and local private sector companies. The company's CMS segment serves clients in the aerospace, automotive, telecommunications, intelligence, defense, and energy sectors, while its P&PS segment serves clients in the advanced manufacturing, cities & places, energy & environment, transportation, and water sectors.

Jacobs' position in the industry is strong, with a reputation for delivering complex projects and solutions to its clients. The company has been recognized for its expertise in areas such as infrastructure modernization, climate change, and digital transformation, and has received numerous awards and accolades for its work.

Jacobs' brand names and/or trade names of its products and services include Critical Mission Solutions, People & Places Solutions, Divergent Solutions, PA Consulting, BlackLynx, and StreetLight. These brands and services showcase Jacobs' commitment to innovation, transformation, and data analytics, and support its clients in addressing global challenges such as climate change, energy transition, and digital transformation.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 1.24B provide 11.13x coverage of short-term debt 111.04M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of 686.70M provides exceptional 46.97x coverage of minority interest expenses 14.62M, showing strong core operations.
Operating cash flow of 686.70M provides strong 11.26x coverage of stock compensation 60.96M, indicating sustainable incentive practices.
Robust free cash flow of 609.80M exceeds capital expenditure of 76.90M by 7.93x, indicating strong organic growth funding capability.
Tangible assets of 5.75B provide exceptional 6.12x coverage of deferred revenue 940.62M, showing strong service capability backing.

Cons

Operating cash flow of 686.70M barely covers its investment activities of (75.29M), with a coverage ratio of -9.12, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 686.70M provides thin coverage of dividend payments of (153.03M) with a -4.49 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Operating cash flow of 686.70M provides insufficient coverage of deferred revenue obligations of 940.62M, which is 0.73x, raising concerns about future service delivery capabilities.
Operating earnings of 650.68M show weak coverage of depreciation charges of 237.58M, with a 2.74 ratio indicating high capital intensity and potential reinvestment needs.
Operating cash flow of 686.70M is outpaced by equity issuance of (719.42M) (-0.95 ratio), indicating concerning reliance on equity markets for funding operations.

Peer Comparison

Companies in the Engineering & Construction

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	PWR	Quanta Services, Inc.	65.02 Bn	63.86	2.39	6.02 Bn
2	FER	Ferrovial SE	48.37 Bn	14.34	5.08	-
3	FIX	Comfort Systems Usa Inc	34.25 Bn	40.89	4.12	0.39 Bn
4	EME	EMCOR Group, Inc.	28.27 Bn	25.01	1.74	0.42 Bn
5	MTZ	Mastec Inc	17.18 Bn	51.88	1.25	2.77 Bn
6	APG	APi Group Corp	16.45 Bn	105.48	2.15	3.05 Bn
7	J	Jacobs Solutions Inc.	16.43 Bn	56.79	1.37	2.71 Bn
8	ACM	Aecom	13.10 Bn	23.31	0.81	3.23 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.61	1.60
EV to Cash from Ops.	26.42	6.21
EV to Debt	6.69	12.02
EV to EBIT	27.88	16.63
EV to EBITDA	16.47	13.11
EV to Free Cash Flow [EV/FCF]	29.75	64.21
EV to Market Cap	1.10	1.27
EV to Revenue	1.51	1.63
Price to Book Value [P/B]	4.51	5.92
Price to Earnings [P/E]	56.79	28.08

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	1.89	2.56
Dividend Payout Ratio %	52.30	17.64
Dividend per Basic Share	0.96	0.24
FCF Dividend Payout Ratio %	18.82	8.25
Interest Coverage	4.46	80.17

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	33.09	-167.27
Cash and Equivalents Growth (1y) %	7.92	637.93
Dividend Growth (1y) %	-17.24	2.92
EBIAT Growth (1y) %	-60.81	92.73
EBITDA Growth (1y) %	9.99	8.03
EBIT Growth (1y) %	-41.20	85.41
EBT Growth (1y) %	-46.15	42.19
EPS Growth (1y) %	-62.36	43.98
FCF Growth (1y) %	-35.11	-20.57
Gross Profit Growth (1y) %	5.37	32.55

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	1.07	1.14
Cash Payout Ratio	0.20	0.05
Cash Ratio	0.37	0.38
Current Ratio	1.30	1.54
Debt to Equity Ratio	0.74	0.89
Interest Cover Ratio	4.46	80.17
Times Interest Earned	4.46	80.17

Profitability

Metric	Value	Industry
EBITDA Margin %	7.40	0.40
EBIT Margin %	5.41	-2.30
EBT Margin %	4.20	-4.58
Gross Margin %	24.80	20.40
Net Profit Margin %	2.40	-5.95

Jacobs Solutions Inc. (NYSE: J)