Jabil (JBL) AI Stock Analysis

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Jabil

(NYSE:JBL)

63Neutral

Jabil's overall stock score reflects a balanced view of its strengths and challenges. The company shows strong operational efficiency and promising growth in AI-related sectors. However, high leverage, declining revenue, and valuation concerns present risks. The mixed technical signals and cautious outlook in certain markets temper the positive aspects of the recent earnings call.

Positive Factors

Financial Performance

JBL raised FY25 guidance which indicates confidence despite uncertainties related to macro, government policy and impact from tariffs.

Growth Potential

Multiple avenues for growth including cloud, semicap, healthcare, and in the longer-term EVs indicate potential for strong expansion.

Strategic Partnerships

The warrant issue with Amazon shows growth potential as it incentivizes Amazon to deepen the relationship with Jabil and provide more business opportunities.

Negative Factors

Industry Challenges

Revenues in Regulated Industries declined 8% year-over-year given softness in EVs and renewable energy.

Market Softness

Regulated Industries in F2Q was guided down 8% year-over-year, reflecting softness in Renewables and EVs.

Jabil (JBL) vs. S&P 500 (SPY)

Market Cap

$12.80B

Dividend Yield0.27%

Average Volume (3M)1.62M

Price to Earnings (P/E)28.0

Beta (1Y)1.53

Revenue Growth-14.45%

EPS Growth-64.32%

CountryUS

Employees138,000

SectorTechnology

Sector Strength40

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)4.18

Shares Outstanding109,534,980

10 Day Avg. Volume1,668,443

30 Day Avg. Volume1,615,880

Financial Highlights & Ratios

PEG Ratio0.17

Price to Book (P/B)N/A

Price to Sales (P/S)0.58

Price to Cash Flow (P/CF)12.70

P/FCF Ratio12.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$171.43

Price Target Upside41.35% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Jabil Business Overview & Revenue Model

Company DescriptionJabil Inc. is a global manufacturing services company headquartered in St. Petersburg, Florida. It operates in various sectors including healthcare, automotive, consumer electronics, and industrial. The company provides comprehensive design, manufacturing, and supply chain solutions for a wide array of industries. Jabil leverages its extensive engineering capabilities and global reach to deliver innovative and scalable solutions to its clients.

How the Company Makes MoneyJabil Inc. generates revenue primarily through its diversified manufacturing services and solutions. The company's revenue model revolves around offering end-to-end manufacturing and supply chain management services, which include design, engineering, production, and logistics. Key revenue streams for Jabil include its Electronics Manufacturing Services (EMS) segment, which caters to industries like consumer electronics and telecommunications, and its Diversified Manufacturing Services (DMS) segment, focusing on healthcare, automotive, and industrial markets. Jabil benefits from strategic partnerships with leading technology firms and original equipment manufacturers, enabling it to secure long-term contracts and sustain steady revenue growth. Additionally, Jabil's global presence and ability to innovate in manufacturing processes contribute significantly to its earnings.

Jabil Financial Statement Overview

Summary

Jabil's financial performance reflects strengths in operational efficiency and cash flow generation, with healthy EBIT and EBITDA margins. However, challenges arise from high leverage and declining revenue, indicating potential risks to financial stability. The company needs to focus on growth and managing its leverage to enhance stability.

Income Statement

Positive

Jabil's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) revenue has declined compared to the previous year, indicating a challenge in maintaining growth. The gross profit margin is approximately 8.9%, which is modest, and the net profit margin stands at 1.8%, reflecting competitive pressure in the industry. The EBIT and EBITDA margins are relatively healthy at 3.9% and 4.7%, respectively, suggesting efficient operational management. However, the overall decline in revenue and net income affects the score.

Balance Sheet

Neutral

Jabil's balance sheet indicates a cautious approach. The debt-to-equity ratio is high at 2.42, signifying significant leverage, which could pose risks if not managed well. The return on equity (ROE) is 35.6%, showing strong profitability relative to equity. However, the equity ratio is low at 7.8%, suggesting limited financial cushion. High leverage coupled with low equity raises concerns about financial stability.

Cash Flow

Positive

The cash flow statement reveals positive trends. Free cash flow has seen significant growth, with a healthy free cash flow to net income ratio of 3.03, indicating efficient cash generation relative to net income. The operating cash flow to net income ratio is 3.50, highlighting robust operational cash flow. These strong cash flow metrics bolster the company's financial flexibility despite the revenue challenges.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
27.45B	28.88B	34.70B	33.48B	29.29B	27.27B
	Gross Profit
2.44B	2.68B	2.87B	2.63B	2.36B	1.93B
	EBIT
1.08B	2.01B	1.54B	1.39B	1.05B	861.64M
	EBITDA
1.28B	2.62B	2.53B	2.36B	1.97B	1.23B
	Net Income Common Stockholders
484.00M	1.39B	818.00M	996.00M	696.00M	54.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
794.14M	2.20B	1.80B	1.48B	1.57B	1.39B
	Total Assets
5.45B	17.35B	19.42B	19.72B	16.65B	14.40B
	Total Debt
1.20B	3.26B	3.25B	3.41B	3.32B	3.14B
	Net Debt
402.22M	1.06B	1.44B	1.93B	1.75B	1.75B
	Total Liabilities
3.96B	15.61B	16.56B	17.27B	14.52B	12.57B
	Stockholders Equity
1.48B	1.74B	2.87B	2.45B	2.14B	1.81B
Cash Flow		Free Cash Flow
1.47B	932.00M	704.00M	266.00M	274.00M	274.24M
	Operating Cash Flow
1.70B	1.72B	1.73B	1.65B	1.43B	1.26B
	Investing Cash Flow
-710.00M	1.35B	-723.00M	-858.00M	-851.00M	-921.11M
	Financing Cash Flow
-1.96B	-2.67B	-680.00M	-888.00M	-413.00M	-65.12M

Jabil Technical Analysis

Technical Analysis Sentiment

Negative

Last Price121.28

Price Trends

50DMA

149.68

Negative

100DMA

146.19

Negative

200DMA

129.85

Negative

Market Momentum

MACD

-3.44

Negative

RSI

39.82

Neutral

STOCH

18.01

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JBL, the sentiment is Negative. The current price of 121.28 is below the 20-day moving average (MA) of 136.29, below the 50-day MA of 149.68, and below the 200-day MA of 129.85, indicating a bearish trend. The MACD of -3.44 indicates Negative momentum. The RSI at 39.82 is Neutral, neither overbought nor oversold. The STOCH value of 18.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JBL.

Jabil Risk Analysis

Jabil disclosed 33 risk factors in its most recent earnings report. Jabil reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Jabil Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESE	80 Outperform	$3.66B	33.30	9.22%	0.23%	8.94%	18.56%
FLEX	78 Outperform	$10.22B	10.80	18.45%	―	-12.94%	47.70%
SANM	74 Outperform	$3.66B	16.45	10.55%	―	-8.92%	-12.11%
PLXS	73 Outperform	$3.03B	26.16	9.27%	―	-3.53%	-3.90%
JBL	63 Neutral	$12.80B	27.96	24.10%	0.27%	-14.45%	-64.32%
TTMI	61 Neutral	$1.81B	32.83	3.66%	―	9.41%	―
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%

* Technology Sector Average

Performance Comparison

JBL

Jabil

121.28

-14.90

-10.94%

ESE

Esco Technologies

142.34

38.05

36.48%

FLEX

Flex

28.07

-0.76

-2.64%

PLXS

Plexus

112.82

14.69

14.97%

SANM

Sanmina-Sci

70.60

11.32

19.10%

TTMI

TTM Technologies

17.97

3.28

22.33%

Jabil Earnings Call Summary

Earnings Call Date: Mar 20, 2025 | % Change Since: -13.05% | Next Earnings Date: Jun 19, 2025

Earnings Call Sentiment Positive

The earnings call indicated strong performance in key segments and a positive outlook for AI-related business and cash flow generation. However, challenges in the regulated industry and Connected Living & Digital Commerce segments, along with inventory management concerns, necessitate caution. Overall, the positives moderately outweigh the negatives.

Highlights

Solid Q2 Revenue and Earnings

Jabil reported strong Q2 results with $6.7 billion in revenue, a 3% year-over-year increase when excluding the divested mobility business. Core operating income was $334 million with core operating margins at 5%.

Intelligent Infrastructure Segment Growth

The Intelligent Infrastructure segment saw revenue of $2.6 billion, up 18% year-on-year, driven by strong demand in AI-related cloud, data center infrastructure, and capital equipment markets. Core operating margin improved by 110 basis points to 5.3%.

Positive Outlook for AI-Related Business

AI-associated business is projected to represent approximately $7.5 billion in revenue for FY 2025, marking a 40% year-on-year increase.

Strong Cash Flow and Share Repurchase

Adjusted free cash flow for the quarter was $261 million, with a year-to-date adjusted free cash flow of $487 million. The company repurchased 2.5 million shares and plans to complete its $1 billion share repurchase authorization by FY 2025.

US Manufacturing Expansion

Jabil is well-positioned to navigate potential tariffs with a significant U.S. manufacturing footprint and plans to expand its operations in India to support photonics capabilities.

Lowlights

Decline in Regulated Industry Segment

The regulated industry segment reported a revenue decrease of 8% year-over-year due to expected weakness in the renewable energy and EV markets.

Challenges in Connected Living & Digital Commerce

Revenue in the Connected Living & Digital Commerce segment was down 13% year-on-year due to the mobility divestiture. Excluding the divestiture, revenue growth was approximately 4%, but there was weaker demand in consumer-driven connected living products.

Inventory Management Concerns

Inventory days increased by 4 days sequentially to 80 days, with net inventory days slightly above the targeted range due to timing within the Intelligent Infrastructure segment.

Cautious Outlook for Certain Markets

The company remains cautious about the EV and renewable energy markets, with expectations of continued caution in these areas for the fiscal year.

Company Guidance

In the fiscal year 2025 second quarter earnings call, Jabil reported strong results with $6.7 billion in revenue, excluding $250 million from the divested mobility business. Revenue grew by 3% year-over-year, with core operating income at $334 million and a core operating margin of 5%. The regulated industry segment saw revenue of $2.7 billion, down 8% due to weakness in renewable energy and EV markets, yet core margins improved to 4.8%. The Intelligent Infrastructure segment experienced an 18% increase in revenue to $2.6 billion, driven by AI-related demand and achieving a core margin of 5.3%. Connected Living & Digital Commerce revenue declined by 13% to $1.3 billion, impacted by mobility divestiture, though excluding it, revenue grew by 4%. Inventory days rose to 80 days, but decreased year-on-year by 7 days. Adjusted free cash flow for Q2 was $261 million, contributing to a year-to-date total of $487 million, with expectations for full-year free cash flow to exceed $1.2 billion. The company anticipates Q3 revenue between $6.7 billion and $7.3 billion, with core diluted EPS projected between $2.08 and $2.48. Jabil also highlighted a 40% increase in AI-related revenue, expecting $7.5 billion in FY 2025, and emphasized its strong U.S. manufacturing footprint amid potential tariff challenges.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.