Jefferies (JEF) AI Stock Analysis

• Market Cap: $11.05B
• Dividend Yield: 2.61%
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 18.9
• Beta (1Y): 1.56
• Revenue Growth: 45.39%
• EPS Growth: 172.96%
• Country: US
• Employees: 7,822
• Sector: Financial
• Sector Strength: 77
• Industry: Capital Markets
• EPS (TTM): 2.98
• Shares Outstanding: 206,148,100
• 10 Day Avg. Volume: 2,327,220
• 30 Day Avg. Volume: 1,744,571
• PEG Ratio: 0.11
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.47
• Price to Cash Flow (P/CF): 1.70
• P/FCF Ratio: 1.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $85.00
• Price Target Upside: 56.22% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Jefferies is well-positioned with strong financial health and strategic growth, highlighted by robust revenue increases and improved leverage. However, the high P/E ratio and neutral technical indicators suggest a cautious outlook for potential overvaluation and market momentum.

Positive Factors

M&A Pipeline

Jefferies starts the year with a renewed M&A pipeline that has a higher likelihood of successful execution.

Market Position

JEF has become a Top 3 player in US EM credit and a Top 5 player in US Distressed and US High Yield within Fixed Income.

Negative Factors

Revenue Mix

The company reported a modest miss on weaker margins and a lower quality revenue mix.

Jefferies Business Overview & Revenue Model

Company Description

Jefferies Financial Group, Inc. is a holding company, which engages in the provision of financial services. It operates through the following segments: Investment Banking, Capital Markets, and Asset Management; Merchant Banking; and Corporate segments. The Investment Banking, Capital Markets, and Asset Management segment consists of investments in Jefferies Group. The Merchant Banking segment includes various merchant banking businesses and investments, primarily including Linkem, Vitesse Energy Finance and JETX Energy, real estate, Idaho Timber, and FXCM. The Corporate segment pertains to cash and cash equivalents, financial instruments owned, and deferred tax asset of the firm. The company was founded in 1968 and is headquartered in New York, NY.

How the Company Makes Money

Jefferies makes money through multiple revenue streams, primarily from its investment banking and capital markets activities. The company generates fees from advising clients on mergers and acquisitions, underwriting equity and debt offerings, and providing restructuring services. In capital markets, Jefferies earns revenue from trading activities, including equities, fixed income, and commodities, as well as from market-making activities and securities lending. Additionally, the company derives income from its asset management operations, which involve managing investment portfolios for clients and earning management and performance fees. Key factors contributing to Jefferies' earnings include its strong client relationships, extensive market expertise, and strategic positioning in major financial markets.

Jefferies Financial Statement Overview

Summary

Jefferies demonstrates strong revenue growth and improved leverage, with a solid balance sheet. Profitability margins are moderate, and there is potential to enhance net income conversion to cash and overall profitability.

Income Statement

Jefferies has demonstrated robust revenue growth over recent years with a 41.28% increase from 2023 to 2024. The gross profit margin stands at 60.41%, indicating strong cost management. However, the net profit margin is moderate at 6.36%, suggesting room for improvement in operational efficiencies. EBIT and EBITDA margins are at 6.77% and 44.05%, respectively, showing solid earnings before interest and taxes with significant depreciation and amortization expenses.

Balance Sheet

The balance sheet shows a healthy equity ratio of 15.78%, indicating a good level of shareholder equity relative to total assets. The debt-to-equity ratio has improved significantly to 0.04, reflecting reduced leverage and financial risk. Return on equity is at a moderate 6.59%, suggesting average profitability from shareholders' investments.

Cash Flow

Free cash flow has improved substantially, turning positive in 2024, indicating better cash generation capabilities. The operating cash flow to net income ratio is 0.48, which shows that a moderate proportion of net income is being converted into cash flows. While the free cash flow growth rate is positive, a cautious approach is warranted due to previous fluctuations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
10.52B	7.44B	7.15B	8.19B	6.01B
	Gross Profit
6.35B	4.03B	2.60B	3.78B	2.38B
	EBIT
712.35M	1.62B	1.44B	2.35B	1.14B
	EBITDA
4.68B	3.21B	1.63B	2.51B	2.17B
	Net Income Common Stockholders
669.27M	277.69M	785.45M	1.67B	775.24M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.15B	9.94B	9.70B	10.76B	9.06B
	Total Assets
64.36B	57.91B	51.06B	60.40B	53.12B
	Total Debt
443.16M	16.09B	11.20B	19.87B	19.83B
	Net Debt
-11.71B	7.57B	1.50B	9.11B	10.77B
	Total Liabilities
54.13B	48.10B	40.63B	49.67B	43.53B
	Stockholders Equity
10.16B	9.71B	10.36B	10.68B	9.53B
Cash Flow		Free Cash Flow
319.70M	-1.93B	1.58B	1.41B	1.90B
	Operating Cash Flow
319.70M	-1.93B	1.80B	1.57B	2.08B
	Investing Cash Flow
-950.12M	-12.20M	-60.54M	-400.59M	-186.19M
	Financing Cash Flow
3.35B	1.06B	-2.84B	994.29M	-723.52M

Jefferies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 54.41
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JEF, the sentiment is Negative. The current price of 54.41 is below the 20-day moving average (MA) of 64.58, below the 50-day MA of 71.41, and below the 200-day MA of 62.88, indicating a bearish trend. The MACD of -4.67 indicates Positive momentum. The RSI at 21.87 is Positive, neither overbought nor oversold. The STOCH value of 10.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JEF.

Jefferies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JPM	81 Outperform	$640.70B	11.76	17.28%	2.07%	17.07%	21.78%
MS	77 Outperform	$180.70B	14.06	13.16%	3.25%	9.17%	53.77%
GS	74 Outperform	$165.83B	13.11	11.95%	2.21%	14.80%	77.97%
C	73 Outperform	$127.20B	11.34	6.04%	3.28%	8.20%	49.26%
JEF	70 Outperform	$11.05B	18.90	6.86%	2.61%	45.39%	172.96%
BAC	70 Neutral	$301.22B	12.39	9.24%	2.51%	13.06%	4.94%
Sector *	64 Neutral	$13.80B	10.64	9.23%	4.22%	17.66%	-7.66%

Jefferies Corporate Events

Jefferies Reports Record Growth and Financial Health

Jefferies begins 2025 in its strongest position ever, driven by its talented team and unique culture, which has led to broad global growth and an enhanced market position. In 2024, the firm achieved $7 billion in net revenues and increased its quarterly dividend by 14.3%, reflecting significant progress in its M&A pipeline, IPO backlog, and trading volumes. The company has returned $6.4 billion to shareholders over seven years and had its credit ratings upgraded, indicating robust financial health and stakeholder alignment.