Are Smart Investors Making the Right Decision? Jack in the Box Inc. (JACK)

Jack in the Box Inc. (NASDAQ: JACK) stock fell -16.14% on Tuesday to $71.24 against a previous-day closing price of $84.95. With 1.78 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.34 million shares. During the session, the Restaurants company that operates in wider Consumer Cyclical sector, reached to the highest price of $79.01 whereas the lowest price it dropped to was $69.01. The 52-week range on JACK shows that it touched its highest point at $98.80 and its lowest point at $54.80 during that stretch. It currently has a 1-year price target of $92.39. With its current market cap of 1.50 billion, JACK has annualized dividend of $1.76 while the current yield stands at 2.47%. Beta for the stock currently stands at 1.67.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of JACK was down-trending over the past week, with a drop of -18.54%, but this was down by -14.26% over a month. Three-month performance dropped to -21.00% while six-month performance rose 3.94%. The stock lost -25.64% in the past year, while it has lost -18.56% so far this year. A look at the trailing 12-month EPS for JACK yields 5.09 with Next year EPS estimates of 6.59. For the next quarter, that number is 1.36. This implies an EPS growth rate of 91.90% for this year and 12.66% for next year. EPS is expected to decline by -0.35% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 14.80%.

Float and Shares Shorts:

At present, 21.24 million JACK shares are outstanding with a float of 20.78 million shares on hand for trading. On Oct 13, 2022, short shares totaled 1.57 million, which was 7.44% higher than short shares on Sep 14, 2022. In addition to Mr. Darin S. Harris as the firm’s CEO & Director, Mr. Timothy E. Mullany serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 105.53% of JACK’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.40% of JACK, in contrast to 65.85% held by mutual funds. Shares owned by individuals account for 35.78%. As the largest shareholder in JACK with 14.52% of the stake, BlackRock Fund Advisors holds 3,056,984 shares worth 3,056,984. A second-largest stockholder of JACK, The Vanguard Group, Inc., holds 2,297,636 shares, controlling over 10.91% of the firm’s shares. Franklin Mutual Advisers LLC is the third largest shareholder in JACK, holding 1,457,391 shares or 6.92% stake. With a 7.40% stake in JACK, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 1,557,732 shares are owned by the mutual fund manager. The American Funds Small Cap World Fu, which owns about 5.97% of JACK stock, is the second-largest Mutual Fund holder. It holds 1,256,700 shares valued at 110.88 million. Franklin Small Cap Value Fund holds 4.76% of the stake in JACK, owning 1,002,927 shares worth 88.49 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for JACK since 20 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 13 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With JACK analysts setting a high price target of $115.00 and a low target of $79.00, the average target price over the next 12 months is $90.82. Based on these targets, JACK could surge 61.43% to reach the target high and rise by 10.89% to reach the target low. Reaching the average price target will result in a growth of 27.48% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. JACK will report FY 2022 earnings on 11/22/2023. Analysts have provided yearly estimates in a range of $6.20 being high and $5.70 being low. For JACK, this leads to a yearly average estimate of $5.88. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Jack in the Box Inc. surprised analysts by -$0.07 when it reported $1.38 EPS against a consensus estimate of $1.45. The surprise factor in the prior quarter was -$0.18. Based on analyst estimates, the high estimate for the next quarter is $1.57 and the low estimate is $1.20. The average estimate for the next quarter is thus $1.36.

Dividends & Yield:

In terms of dividends, JACK has a current ratio of $1.76, which is $1.76 over the trailing 12-months, while a dividend of $1.59 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and JACK currently yields $2.06. In the past year, JACK’s dividend yield has been $2.06, but when looking at the stock over the past five years, its yield has been $1.93. Accordingly, JACK has a current buyback yield of $4.2. This was $4.2 for the TTM, and it was $10.42 for the past five years.

Summary of Insider Activity:

Insiders traded JACK stock several times over the past three months with 15 Buys and 2 Sells. In these transactions, 1,647 shares were bought while 255 shares were sold. The number of buy transactions has increased to 77 while that of sell transactions has risen to 18 over the past year. The total number of shares bought during that period was 56,522 while 6,134 shares were sold.

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