Reassessing Jabil Stock Amid 51% Surge in 2024

Jabil stock has surged 51.1% in 2024, a 76.8% gain over the last 12 months, and a 541.1% increase in five years. The company is undervalued in only 1 out of 6 valuation checks, according to a discounted cash flow analysis. Analysts estimate Jabil generated $911.8 million in free cash flow over the last 12 months, with projected figures reaching $1.35 billion by 2026 and $1.51 billion by 2028. The intrinsic value comes out to $264.67 per share, indicating the stock is undervalued compared to its future cash generation.

Jabil Inc. (JBL) has experienced a remarkable surge in its stock price, with a 51.1% increase in 2024, a 76.8% gain over the last 12 months, and a staggering 541.1% increase in the past five years. This impressive performance has drawn significant attention from investors seeking growth opportunities. However, the question remains whether the stock is fairly valued or if there are still opportunities for savvy investors.

A recent analysis by Simply Wall St indicates that Jabil is undervalued in only one out of six valuation checks. The analysis uses a discounted cash flow (DCF) model, which estimates the company's value by projecting future cash flows and discounting them to the present. According to this model, Jabil generated $911.8 million in free cash flow over the last 12 months, with projections suggesting that this figure will climb to $1.35 billion by 2026 and $1.51 billion by 2028. The intrinsic value calculated by the DCF model comes out to $264.67 per share, indicating that the stock is undervalued compared to its future cash generation Should You Rethink Your Position on Jabil After a 51% ...^[1].

The Price-to-Earnings (PE) ratio is another metric used to gauge valuation. Jabil currently trades at a PE ratio of 35.26x, which is higher than both the electronic industry average of 23.95x and its peer group average of 32.51x. However, Simply Wall St's Fair Ratio, which factors in growth prospects, profit margins, market cap, and risks, suggests that Jabil is trading at about the valuation it deserves based on its financial profile and outlook. The Fair Ratio for Jabil is currently 31.69x, which is close to the actual PE ratio Should You Rethink Your Position on Jabil After a 51% ...^[1].

In addition to these valuation metrics, Jabil's recent financial performance has been robust. The company reported a net revenue of $8.3 billion for the fourth quarter of fiscal year 2025, exceeding analyst estimates. The company's annual revenue reached $29.8 billion, and its annual diluted EPS stood at $5.92, although this was below estimates. The company generated robust free cash flow of $1.64 billion for fiscal year 2025. Looking ahead, Jabil expects fiscal year 2026 revenue to reach approximately $31.3 billion, with a core diluted EPS (Non-GAAP) of $11.00, indicating continued confidence in its growth trajectory Jabil Inc Reports Q4 Revenue of $8.3 Billion, Exceeding Estimates; EPS of $1.99 Misses Expectations^[2].

In conclusion, while Jabil's stock has surged significantly, a detailed valuation analysis suggests that the stock may still be undervalued based on its future cash generation. However, investors should consider other valuation metrics and the company's recent financial performance before making investment decisions.