Jack Henry (JKHY) Boosts Banking Automation With SMA Partnership
Jack Henry & Associates JKHY expanded its partnership with SMA Technologies, a leading provider of Workload Automation & Orchestration platform, and the maker of OpCon.
Per the terms of the deal, SMA will use Jack Henry's SilverLake data center with its OpCon’s automation and orchestration to help banks.
The partnership will allow financial institutions and Jack Henry data centers to access API connectivity to streamline their workflow management.
The agreement provides OpCon to OpCon connectivity, enabling customers to increase visibility and control.
The collaboration aims to increase operational efficiencies for credit unions and banks across the United States.
The latest move is expected to help Jack Henry gain momentum among banks and credit unions, which, in turn, will drive its top line in the days ahead.
Jack Henry & Associates, Inc. Price and Consensus
Jack Henry & Associates, Inc. price-consensus-chart | Jack Henry & Associates, Inc. Quote
Expanding Portfolio: Key Catalysts
The latest move bodes well for Jack Henry’s growing efforts toward expanding its portfolio.
Recently, it unveiled a policy management solution that streamlines policy creation, review, approvals, attestations, and exceptions with workflows, documentation and storage on a single platform.
Additionally, the company collaborated with a leading provider of payroll connectivity, Atomic. Now, with the active availability of the Deposit solution on the JKHY digital banking platform, existing Banno users can install and activate the Deposit plugin to their bank’s mobile app or online banking platform in a couple of hours.
The partnership with Atomic bodes well with Jack Henry’s growing efforts to strengthen its digital banking platform.
Growing Customer Base
An expanding portfolio continues to aid Jack Henry in gaining strong customer momentum.
Recently, the company’s Symitar platform was selected by L&N Federal Credit Union. The latter strives to build and offer solutions through fintech relationships, equip its members with advanced tools, streamline its operations, and boost efficiencies on the back of Symitar.
Additionally, JKHY got picked by TIB for leveraging its technology platform to support near and long-term operations.
It also helps to support community banks in their operations and growth strategies, and helps them compete against larger financial institutions.
Notably, the company's second-quarter fiscal 2023 top-line growth was driven by rising processing revenues. Strong momentum across the Payments and Complementary segments drove the results.
Further, processing revenues were $214.6 million (42% of revenues) in the reported quarter, up 9% year over year.
Payments revenues totaled $191.5 million (38% of the total revenues) and Complementary revenues were $142.3 million (28% of the total revenues), increasing 3% and 4% from the year-ago quarter, respectively.
The Zacks Consensus Estimate for third-quarter fiscal 2023 revenues is pegged at 501.19 million, which suggests a 4.79% rise from the prior-year period’s reported figure.
Coming to price performance, shares of Jack Henry have lost 19.6% in the past year compared with the industry's and the sector’s declines of 26.9% and 13.6%, respectively.
However, declining services and support revenues, and weakness in the corporate segment remained concerning.
Services & support generated revenues of $290.7 million, which contributed to 58% of revenues. The figure fell 2% from the year-ago quarter’s level, owing to a 64% decline in deconversion fees.
Zacks Rank & Stocks to Consider
Currently, Jack Henry carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Computer and Technology sector are Arista Networks ANET, Salesforce CRM and Analog Devices ADI. Arista Networks and Salesforce sport a Zacks Rank #1 (Strong Buy), and Analog Devices carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have gained 29.1% in the past year. The long-term earnings growth rate for ANET is projected at 14.17%.
Salesforce shares have lost 10.9% in the past year. CRM’s long-term earnings growth rate is projected at 16.75%.
Analog Devices shares have gained 16.6% in the past year. The long-term earnings growth rate for ADI is projected at 12.25%.
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