Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Jack Henry & Associates, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.1% to 7.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 61, DPO 7, DIO 60). At a 9.3% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $100.58 per share, suggesting JKHY is overvalued by 36.2% at the current price of $157.74.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 575 | 611 | 652 | 703 | 758 | 777 |
| (−) Net Interest | 11 | 11 | 12 | 13 | 14 | 14 |
| (+) D&A | 75 | 57 | 71 | 85 | 97 | 100 |
| EBITDA | 661 | 679 | 734 | 800 | 869 | 890 |
| (−) Tax | 130 | 138 | 147 | 159 | 171 | — |
| (−) CapEx | 98 | 104 | 111 | 120 | 129 | — |
| (−) ΔWC | 346 | 40 | 45 | 56 | 61 | — |
| Free Cash Flow (FCF) | 87 | 397 | 431 | 466 | 508 | — |
| Peers' EBITDA Multiple | 10.1x | |||||
| Terminal Value | 9,028 | |||||
| WACC / Discount Rate | 9.31% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 84 | 347 | 345 | 341 | 340 | 5,786 |
| Enterprise Value | 7,243 | |||||
| Projection Period | 1,457 | 20.1% | ||||
| Terminal Value | 5,786 | 79.9% | ||||
| (−) Current Net Debt | (102) | |||||
| Equity Value | 7,345 | |||||
| (÷) Outstanding Shares | 73M | |||||
| Fair Price | $101 | -36.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.1x | 8.1x | 10.1x | 12.1x | 14.1x |
|---|---|---|---|---|---|
| 7.3% | $75 | $92 | $109 | $126 | $144 |
| 8.3% | $72 | $88 | $105 | $121 | $138 |
| 9.3% | $69 | $85 | $101 | $116 | $132 |
| 10.3% | $67 | $82 | $97 | $111 | $126 |
| 11.3% | $64 | $78 | $93 | $107 | $121 |
Current price: $157.74. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.