Company Reports

We are adjusting our fair value estimate for Jacobs Solutions to $121 from $159, which reflects the spinoff of the firm's Critical Mission Solutions and cyber and intelligence businesses. On Sept. 27, these businesses were spun off and merged with Amentum to form a new publicly traded company. Jacobs shareholders received one share of Amentum Holdings (trading on the NYSE under the ticker AMTM) for each share of Jacobs held on Sept. 23.

In September 2024, Jacobs Solutions completed the spinoff of its critical mission solutions and cyber and intelligence businesses. On Sept. 27, these businesses were spun off and merged with Amentum to form a new publicly traded company. Jacobs shareholders received one share of Amentum Holdings (trading on the NYSE under the ticker “AMTM”) for each share of Jacobs held on Sept. 23.

Under the leadership of former CEO Steve Demetriou, Jacobs Solutions transformed its portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs Solutions sold its energy, chemicals, and resources, or ECR, business to WorleyParsons for $3.3 billion. Jacobs Solutions operates four business segments: critical mission solutions, people and places solutions, divergent solutions, and PA consulting.

We’ve maintained our $159 per share fair value estimate for Jacobs Solutions after the company reported its fiscal third-quarter earnings. There were no major surprises in Jacobs’ results, as its adjusted EPS of $1.96 was in line with the FactSet consensus estimate. Management narrowed its full-year guidance and now anticipates adjusted EPS of $7.85 to $8.05 ($7.80 to $8.10 previously). Jacobs ended the quarter with a $30.6 billion backlog, up 6% from the prior-year period, which should drive solid growth in the fiscal fourth quarter and into fiscal 2025.

Jacobs’ fiscal second-quarter adjusted EPS of $1.91 beat the FactSet consensus estimate by $0.06, but revenue of $4,269 million fell 1.3% short of expectations. While nothing in the earnings release materially changes our long-term outlook for Jacobs, we’ve modestly raised our fair value estimate to $159 from $157, mostly due to time value of money.

Under the leadership of former CEO Steve Demetriou, Jacobs Solutions transformed its portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs Solutions completed the sale of its energy, chemicals, and resources, or ECR, business to WorleyParsons for $3.3 billion. Jacobs Solutions operates four business segments: critical mission solutions, people & places solutions, divergent solutions, and PA consulting.

Jacobs posted solid fiscal first-quarter results, featuring a 28% year-over-year increase in adjusted EPS, from $1.57 to $2.02. While nothing in the earnings release materially alters our long-term thesis, we’ve raised our fair value estimate to $157 from $154, mostly due to time value of money. We see the name as modestly undervalued at current levels, with shares trading at a roughly 11% discount to our updated fair value estimate.

Under the leadership of former CEO Steve Demetriou, Jacobs Solutions transformed its portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs Solutions completed the sale of its energy, chemicals, and resources, or ECR, business to WorleyParsons for $3.3 billion. Jacobs Solutions operates four business segments: critical mission solutions, people & places solutions, divergent solutions, and PA consulting.

We are lowering our fair value estimate for Jacobs to $154 from $156 after the company reported its fiscal fourth-quarter results and announced an agreement to separate its critical mission solutions business. The fair value adjustment reflects our slightly more muted near-term operating margin projections, partially offset by the time value of money.

Under the leadership of former CEO Steve Demetriou, Jacobs Solutions transformed its portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs Solutions completed the sale of its energy, chemicals, and resources, or ECR, business to WorleyParsons for $3.3 billion. Jacobs Solutions operates four business segments: critical mission solutions, people & places solutions, divergent solutions, and PA consulting.

While nothing in Jacobs’ fiscal third-quarter earnings release materially alters our long-term outlook for the firm, we’ve slightly increased our fair value estimate to $156 from $155, mostly due to time value of money. The planned separation of the critical missions solutions business remains on pace to be completed in fiscal 2024. We view the name as moderately undervalued, with shares currently trading in 4-star territory.

Under the leadership of former CEO Steve Demetriou, Jacobs Solutions transformed its portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs Solutions completed the sale of its energy, chemicals, and resources, or ECR, business to WorleyParsons for $3.3 billion. Jacobs Solutions operates four business segments: critical mission solutions, people & places solutions, divergent solutions, and PA consulting.

We’ve raised our fair value estimate for Jacobs to $155 from $152 after the company reported solid fiscal second-quarter results, featuring a 5% year-over-year increase in adjusted EPS, and announced plans to spin off the critical missions solutions business in the second half of fiscal 2024. The fair value adjustment reflects our slightly more optimistic near-term operating margin projections and time value of money.

Under the leadership of former CEO Steve Demetriou, Jacobs transformed its portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs completed the sale of its energy, chemicals, and resources, or ECR, business to WorleyParsons for $3.3 billion. Jacobs operates four business segments: critical mission solutions, people & places solutions, divergent solutions, and PA Consulting.

Under the leadership of former CEO Steve Demetriou, Jacobs transformed its portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs completed the sale of its energy, chemicals, and resources, or ECR, business to WorleyParsons for $3.3 billion. Jacobs operates four business segments: critical mission solutions, people & places solutions, divergent solutions, and PA Consulting.

Jacobs posted solid fiscal first-quarter results, with adjusted EPS from continuing operations of $1.67 up 7% and adjusted EBITDA of $339 million up 9% from the same period last year. We've increased our fair value estimate to $152 from $150, which reflects our slightly more optimistic revenue growth and operating margins projections as well as time value of money. We see the name as modestly undervalued, with the stock currently trading in 4-star territory.

There were no major surprises in Jacobs’ fiscal fourth-quarter earnings as the firm’s full-year fiscal 2022 revenue of $14,923 million and adjusted EPS of $6.93 came roughly in line with our estimates ($14,905 million and $6.93, respectively). After rolling our model forward one year, we’ve maintained our $150 fair value estimate for Jacobs, as time value of money offset our slightly more muted near-term projections. We view the name as modestly undervalued, with shares currently trading in 4-star territory.

Since taking the helm in 2015, CEO Steve Demetriou has transformed Jacobs’ portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs completed the sale of its energy, chemicals, and resources (ECR) business to WorleyParsons for $3.3 billion. Jacobs operates three business segments: critical mission solutions, people & places solutions, and PA Consulting.

Since taking the helm in 2015, CEO Steve Demetriou has transformed Jacobs’ portfolio to increase recurring revenue and reduce cyclicality. In 2017, Jacobs acquired CH2M for $3.3 billion to bolster its presence in the transportation, water, nuclear, and environmental services end markets. In April 2019, Jacobs completed the sale of its energy, chemicals, and resources (ECR) business to WorleyParsons for $3.3 billion. Jacobs operates three business segments: critical mission solutions, people & places solutions, and PA Consulting.

We maintain our $150 fair value estimate and Standard capital allocation rating for Jacobs after the company announced its leadership succession plan. Bob Pragada, the firm’s current president and chief operating officer, will be appointed chief executive officer and join the board of directors on Jan. 24, 2023. Steve Demetriou, the current chief executive officer and chair, will continue to serve as executive chair of the board of directors for at least two years.