Wachovia Resumes Coverage on Jack Henry & Associates (JKHY) with an Outperform

May 20, 2009 9:21 AM EDT

Wachovia resumes coverage on Jack Henry & Associates (Nasdaq: JKHY) with an Outperform. $24 to $26 Valuation Range.

Wachovia analyst says, "We view JKHY as a high-quality company in the financial technology space. In our opinion, JKHY’s highly visible revenue stream, growing payments franchise and shareholder-friendly use of free cash makes the company an attractive investment opportunity at current valuations. Over the last several years, JKHY’s revenue model has transitioned from one which was equally dependent on traditional software and hardware sales (which tend to be more uneven and cyclical) and ‘recurring’ revenue to one which is largely ‘recurring’ in nature today. In our opinion, this is a preferable model that shields JKHY from significant earnings declines during weak economic periods (falling software and hardware sales) and provides increased visibility for management to invest in products, make acquisitions and return increasing amounts of free cash to shareholders...Strong product lineup positions JKHY to capitalize on higher growth areas of bank spending...Shareholder-friendly use of free cash."

Jack Henry & Associates, Inc. (JHA) provides integrated computer systems for in-house and outsourced data processing to commercial banks, credit unions and other financial institutions.

To see more analyst ratings on JKHY Click Here.

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