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Jack Henry's (JKHY) Client Base to Get a Boost With FedNow

Jack Henry & Associates JKHY has announced its readiness to support the launch of the Federal Reserve's real-time payments network, FedNow Service.

The network enables instant fund transfers between financial institution accounts in the United States.

The service aims to provide innovative payment solutions and meet evolving instant payment needs.

With the help of the partnership with the Federal Reserve, JKHY is expanding its presence in the real-time payments market.

Jack Henry has been at the forefront of faster payments and has developed its own payments hub, JHA PayCenter, which will be used to connect financial institutions to FedNow Service.

The JHA PayCenter also connects financial institutions to various other payment networks, including Zelle and RTP.

With FedNow Service, JKHY will be able to gain strong traction among the financial institutions, which, in turn will expand its clientele.

Further, it will also strengthen the company’s presence in the real-time digital payments world.

Jack Henry & Associates, Inc. Price and Consensus

Jack Henry & Associates, Inc. Price and Consensus
Jack Henry & Associates, Inc. Price and Consensus

Jack Henry & Associates, Inc. price-consensus-chart | Jack Henry & Associates, Inc. Quote

Portfolio Strength a Key Catalyst

The latest move bodes well for Jack Henry’s growing efforts toward offering advanced services to financial institutions through portfolio expansion and strategic partnership.

Recently, Jack Henry introduced a policy management solution that combines workflows, documentation, and storage on a single platform to streamline policy creation, review, approvals, attestations and exceptions.

Furthermore, the acquisition of Payrailz, a digital payment startup, to expand its payment capabilities for assisting financial institutions in effortlessly catering to the needs of consumer and commercial account holders is noteworthy.

Growing Customer Base

A strengthening portfolio will likely continue to aid Jack Henry in gaining strong customer momentum.

Recently, Jack Henry’s modern core infrastructure was selected by First Community Bank, Sunrise Bank and Today's Bank to provide better service to retail and business customers.

Additionally, the company extended its partnership with Farmers and Merchants Bank, which intends to expand its business and agricultural accounts to larger markets by leveraging Jack Henry's Banno Business.

Further, SMA Technologies recently collaborated with Jack Henry to improve operational efficiencies for banks & credit unions. Per the terms of the deal, SMA will use Jack Henry's SilverLake data center with its OpCon’s automation and orchestration to help banks.

We note that an expanding customer base is likely to contribute to Jack Henry’s top-line growth in the near term. This will aid the company in winning investors’ confidence.

The Zacks Consensus Estimate for JKHY’s fourth-quarter fiscal 2023 revenues is pegged at $510.64 million, which suggests a 5.8% rise from the prior-year period’s reported figure.

Coming to the price performance, shares of Jack Henry have lost 12.6% in the past year compared with the industry's decline of 19.8%.

Zacks Rank and Stocks to Consider

Currently, Jack Henry carries a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Agilent Technologies A, DigitalOcean DOCN and AMETEK AME. Agilent Technologies, DigitalOcean and AMETEK each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent Technologies shares have gained 9.2% in the past year. The Zacks Consensus Estimate for A’s second-quarter fiscal 2023 earnings is pegged at $1.27 per share, suggesting an increase of 12.4% from the prior-year quarter’s reported figure.

DigitalOcean shares have risen 2.2% in the past year. The Zacks Consensus Estimate for DOCN’s second-quarter earnings is pegged at 38 cents per share, suggesting a jump from 20 cents per share reported in the prior-year quarter.

AMETEK shares have rallied 19.5% in the past year. The Zacks Consensus Estimate for AME’s second-quarter earnings is pegged at $1.50 per share, suggesting an increase of 8.7% from the prior-year quarter’s reported figure.

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