Investment Thesis
Jacobs Solutions demonstrates solid operational cash generation and manageable leverage, but declining profitability and weak returns on capital raise concerns about business quality. The company shows revenue growth resilience, yet deteriorating earnings per share and modest operating margins suggest operational challenges or increased costs that warrant caution.
J Strengths
- Strong free cash flow generation of $364.9M with 11.1% FCF margin provides financial flexibility
- Moderate leverage at 0.72x debt-to-equity with adequate interest coverage of 2.7x
- Consistent revenue growth of 4.6% YoY demonstrates market demand and contract execution capability
- Substantial cash position of $1.6B provides operational cushion and investment capacity
J Risks
- Declining net income (-4.8% YoY) and severe diluted EPS contraction (-62.3% YoY) signal margin compression or increased share count
- Weak profitability metrics with 3.8% net margin and 7.1% operating margin indicate thin earnings on revenue base
- Poor returns on equity (3.6%) and assets (1.1%) suggest inefficient capital deployment despite $11.6B asset base
- Low current and quick ratios at 1.33x indicate tight near-term liquidity relative to current liabilities
Key Metrics to Watch
- Operating margin trend and gross margin sustainability amid cost pressures
- Return on equity improvement and capital efficiency metrics
- Debt reduction trajectory and long-term debt management relative to operating cash flows
J Financial Metrics
J Profitability Ratios
J Balance Sheet & Liquidity
J 5-Year Financial Trend
5-Year Trend Summary: JACOBS SOLUTIONS INC.'s revenue has declined by 15% over the 5-year period, indicating business contraction. The most recent EPS of $5.30 reflects profitable operations.
J Growth Metrics (YoY)
J Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $2.9B | -$18.1M | $-0.11 |
| Q3 2025 | $2.9B | $146.9M | $1.17 |
| Q2 2025 | $2.8B | $5.6M | $-0.05 |
| Q1 2025 | $2.8B | -$18.1M | $-0.11 |
| Q3 2024 | $4.2B | $146.9M | $1.17 |
| Q2 2024 | $4.1B | $162.1M | $1.28 |
| Q1 2024 | $3.8B | $135.6M | $1.06 |
| Q3 2023 | $3.8B | $164.2M | $1.29 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
J Capital Allocation
J SEC Filings
Access official SEC EDGAR filings for JACOBS SOLUTIONS INC. (CIK: 0000052988)