Jacobs Solutions Inc. (J) stock analysis

P/E above its 5-year median

Jacobs Solutions's P/E of 53.3 is above its own 5-year median of 30.8.

P/E above the industry

Jacobs Solutions's P/E of 53.3 is above the Heavy Construction Other Than Building Construction Contractors median of 28.1.

EV/EBITDA above its 5-year median

Jacobs Solutions's EV/EBITDA of 28.2 is above its 5-year median of 25.0.

P/B above the industry

Jacobs Solutions's price-to-book of 5.63 is above the Heavy Construction Other Than Building Construction Contractors median of 5.11.

Trading above fair value

The share price of $157.11 is above our fair value estimate of $92.96.

Margin of safety under 20%

The price is 69.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 7.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -21.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -31.3% over the last twelve months, against a 5-year average of -10.1% a year.

Growing faster than the industry

Revenue grew 20.1% over the last twelve months; the Heavy Construction Other Than Building Construction Contractors median is 5.2%.

Guidance raised

Jacobs Solutions raised its fiscal 2026 adjusted EBITDA margin outlook on Aug 4, 2026.

Gross margin slipping

Gross margin was 22.1% over the last twelve months, against 25.0% a year earlier.

Return on equity under 15%

Return on equity was 9.6% over the last twelve months and averaged 10.2% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 7.7%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Jacobs Solutions's return on equity of 9.6% is below the Heavy Construction Other Than Building Construction Contractors median of 14.8%.

Earnings shrank over 5 years

Net income shrank 10.1% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 2.4% over the last twelve months, against a 5-year average of 5.1%.

Net margin above the industry

Jacobs Solutions's net margin of 2.4% is above the Heavy Construction Other Than Building Construction Contractors median of 1.6%.

High debt

Debt is 110% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 28.8% five years ago to 110%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 20.6% of total debt.

Interest not well covered

Operating income covers interest expense 3.9 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.29 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.92; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Jacobs Solutions paid dividends worth 0.9% of the share price over the last twelve months.

Yield below Treasuries

The 0.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Jacobs Solutions yields 0.9%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 47.8% of net income.

Covered by free cash flow

Dividends take 25.1% of free cash flow.