Key Takeaways
- Jabil shares fell about 10% on Wednesday even though its fiscal Q4 results and its fiscal 2027 guidance for $44.5 billion in revenue both topped consensus.
- The selloff looks like an overreaction, because management expects core EPS to grow 34% to $17.55 next year.
- The weak spots are margin and cash: core operating margin rises only 30 basis points to 6.1%, and adjusted free cash flow stays near $1.6 billion.
- At about $285, shares trade near 16x guided fiscal 2027 core EPS, and fiscal Q1 results are the next test.
Jabil (JBL) beat Wall Street’s numbers, guided next year above them too, and still sank about 10% on Wednesday (shares currently trading at about $285).
That’s quite the reception for a company whose CEO is touting “accelerating AI demand.” It also came on a day when tech stocks were broadly higher.
What exactly happened
Jabil reported fiscal fourth-quarter results before Wednesday’s open. The numbers beat consensus on every line, according to TheFly:
- Q4 revenue of $10.6 billion vs. $9.72 billion expected
- Q4 core EPS of $4.40 vs. $4.08
- Fiscal 2027 revenue guidance of $44.5 billion, up 24%, vs. $42.93 billion
- Fiscal 2027 core EPS guidance of $17.55, up 34%, vs. $16.92
(“Core” is Jabil’s adjusted figure. It strips out items like stock-based compensation and restructuring charges.)
CEO Mike Dastoor pointed to “accelerating AI demand complemented by solid growth in automotive, healthcare, energy infrastructure, defense and aerospace, and warehouse and retail automation.”
Why sell a beat?
Shares were down about 4% premarket and kept sliding once the bell rang. Even after the drop, the stock is up about 49% over the past year.
Here’s the thing: a beat only matters relative to what the price already assumed. So the question is how much AI growth was already baked in…
Even after Wednesday’s drop, Jabil trades at about 20x forward earnings, well above its 5-year average of 14x and down from this summer’s peak near 28x.
That reading still leans partly on fiscal 2026 estimates. Against management’s fiscal 2027 guide, the multiple falls to about 16x, down from roughly 18x before the selloff. That’s modest for 34% earnings growth, even if it’s no longer cheap against Jabil’s own history.
The real knock is the quality of that growth. Core operating margin rises just 30 basis points, to a thin 6.1%. Adjusted free cash flow of about $1.6 billion is barely above fiscal 2026’s $1.53 billion, despite 24% more revenue. Growth this fast ties up cash: inventory swelled to $7.41 billion at fiscal year-end from $4.68 billion a year earlier.
What’s next
The first test is fiscal Q1, the quarter ending in November. Jabil guided to $10.6 billion to $11.4 billion in revenue and $3.80 to $4.20 in core EPS, both above consensus ($10.09 billion and $3.66).
Then watch whether analysts move their estimates up to management’s guide…
Consensus still sits at $16.92 for fiscal 2027, about 4% below management’s $17.55 guide, while the Street already expects $20.62 in fiscal 2028.
My take: the market is punishing thin margins at a business growing earnings by a third. At 16x guided earnings, I think this drop is a chance to buy the AI story at a more reasonable price. Wall Street’s average price target of about $427 sits roughly 50% above today’s price, so analysts clearly agree.
So what is Jabil stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
