Jabil Circuit Inc (JBL)

Conclusion

Jabil Inc. is a US-based provider of engineering, electronics manufacturing and supply chain services to customers in sectors such as automotive, data centres, healthcare and defence. At a price of 252.56 USD on 9 November 2026, the market capitalisation is 26.0 billion USD.

The verdict is overvalued. Enterprise value to EBITDA stands at 13.5x against a ten-year median of 5.8x, a premium of 133.8%, and price to book at 16.1x against 4.1x, a premium of 293.3%. Price to earnings, at 25.0x against 24.4x, is close to its median, with a premium of 2.1%. The discounted cash flow gives 171.07 USD per share at a discount rate of 11.6%, while the fair value from historical multiples is 104.60 USD. The fair value band runs from 110.27 to 165.40 USD with a midpoint of 137.83 USD, giving a margin of safety of -45.4%. The reverse DCF implies growth of 11.5% a year, against a five-year revenue CAGR of 4.2%.

What supports the case is the earnings quality: free cash flow conversion of 131.9% over the last twelve months, eight beats in eight quarters, and a return on invested capital of 26.7% against a WACC of 10.8%. What could break it is the liquidity and leverage position, with a current ratio of 0.99 and an insolvency risk estimate of 5.2%, together with multiples far above their own history.

Financial health

Financial health is yellow: net debt to EBITDA of 1.1x holds it up, while the current ratio of 0.99 and interest coverage of 4.8x are only neutral. The quick ratio is 0.44 and debt to equity is 2.49, so the balance sheet relies on operating cash flow rather than liquid assets. The Altman Z-score is 2.45, in the grey zone. The Altman model was designed for manufacturers, and the company's electronics manufacturing business fits that frame. Insolvency risk: medium, about 5.2% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is green, held up by strong cash conversion, buybacks and a clean record of beats. Free cash flow conversion is 131.9% over the last twelve months and 90.8% over five years. The accrual ratio of -4.2% is negative, meaning reported earnings are backed by cash. Stock-based compensation is 0.4% of revenue, leaving free cash flow after it at 1.23 billion USD. The share count has fallen at 6.8% a year over five years, which points to buybacks. The Piotroski score is 7 out of 9. The Beneish M-score is not available. The company beat earnings estimates in all 8 of the last quarters, with an average surprise of 6.7%. Estimates for the current year rose 5.6% over 90 days, with nine upward revisions and none downward in the last 30 days.

Profitability

Profitability is yellow: returns on capital are strong, but margins are thin. Gross margin is 9.2% against a ten-year median of 8.1%, operating margin 4.7% against 3.8%, and net margin 2.9% against 2.3%. Margin stability is 39.0%. Return on invested capital is 26.7% against a WACC of 10.8%, which gives a given spread of 15.9% and marks the business as creating value. Return on equity of 64.6% is inflated by leverage. The DuPont split shows a net margin of 2.9%, an asset turnover of 1.31x and an equity multiplier of 17.0x. Most of the return comes from the balance sheet, not from margins.

Growth

Growth is green, driven by earnings and cash flow per share rather than by revenue. Revenue compound growth is 1.2% over three years, 4.2% over five and 7.0% over ten. Revenue grew in 9 of the last 10 years. Earnings per share compound at 17.4% over three years, 16.3% over five and 22.2% over ten. Free cash flow per share compounds at 35.4% over three years and 48.1% over five. The price implies growth of 11.5% a year, which is well above the five-year revenue record.

Valuation

Valuation is red: every multiple on enterprise value, sales and book value sits well above its ten-year median. Price to earnings is 25.0x against 24.4x, a premium of 2.1%. Enterprise value to EBITDA is 13.5x against 5.8x, a premium of 133.8%. Price to free cash flow is 18.9x against 21.3x, a discount of 11.2%. Price to sales is 0.72x against 0.30x, a premium of 141.5%, and price to book is 16.1x against 4.1x, a premium of 293.3%. The discounted cash flow gives 171.07 USD per share at a discount rate of 11.6% and terminal growth of 2.5%, with 45.5% of the value in the terminal period. The fair value from historical multiples is 104.60 USD. The fair value band is 110.27 to 165.40 USD, with a midpoint of 137.83 USD and a margin of safety of -45.4%. The fair value is an order of magnitude built on fixed assumptions, including a 5% equity risk premium and capped growth, not a price target. The dividend yield is 0.1% and the payout on free cash flow is 2.6%.

Risks

The main risk is the valuation: a price far above historical multiples depends on the company sustaining growth close to the 11.5% the market implies, while revenue has grown 4.2% a year over five years. A current ratio below 1 leaves little cushion for short-term obligations, and a fall in operating profit would squeeze interest coverage of 4.8x on debt to equity of 2.49. The insolvency risk estimate of 5.2% and the grey Altman zone point to a weaker balance sheet than the earnings record suggests. The Beneish M-score reading is not available. This analysis cannot assess the debt maturity schedule or revenue by segment, so refinancing needs and the mix between business lines remain unknown.