Tax-filing facilitator Jackson Hewitt
What analysts say:
- Buy, sell, or waffle? Take the nine analysts who follow Jackson Hewitt, subtract the half-dozen who rate it a hold, add zero buy ratings, and you're left with three sells.
- Revenue. On average, the analysts are looking for sales to slide 1% to $5.8 million.
- Earnings. The per-share loss is expected to expand to $0.46.
What management says:
Maybe it's because we're in the slow season, post-April 15. Maybe it's because the firm has been too busy buying stock and paying dividends ($158 million worth, combined, last year) to talk. But management has been pretty quiet at Jackson Hewitt lately. It hasn't said much about the IRS and Justice Department investigations into alleged fraud at one of its franchises. Hasn't said much of anything, actually.
What management does:
Maybe we should let the numbers speak for themselves. Rolling gross, operating, and net margins all turned sharply up last quarter, breaking a long-term downward trend. (Whether the company can keep things headed up in spite of the bad publicity of the federal investigations is the real question.) The company's gross margin remains far superior to that of its archrival H&R Block
|
1/06 |
4/06 |
7/06 |
10/06 |
1/07 |
4/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
56.7% |
56.7% |
56.2% |
54.9% |
53.1% |
55.9% |
|
Operating |
41.0% |
40.5% |
39.8% |
38.0% |
37.3% |
41.5% |
|
Net |
21.5% |
21.0% |
21.3% |
19.9% |
19.7% |
22.3% |
One Fool says:
However the numbers in the table above change Thursday, I don't think a Fool needs to worry or exult. After all, Q1 revenue is expected to make up just 2% of total revenue for this fiscal year, barely more than a drop in the company's annual sales bucket.
What really matters at this firm is the all-important Q4 tax-filing season. Perhaps that's why, over at Motley Fool Hidden Gems Pay Dirt, analyst Jim Gillies predicts the shares could "drift at least until the next tax season begins to gather steam in the late fall." In the meantime, Jim suggests we keep an eye on the firm's growth initiatives. Specifically, we should watch for news that Jackson Hewitt is "adding franchisees," making progress in reaching the "underserved Hispanic market" and seeing any traction in its new customer loyalty plans, all of which will be needed to help make up revenue streams lost with the firm's "discontinued preseason refund-anticipation loans."
For related Foolishness:
Fool contributor Rich Smith owns shares of Jackson Hewitt. Jackson Hewitt is a Pay Dirt recommendation. The Motley Fool has a disclosure policy.
