Is Jacobs Solutions Inc. (J) Fairly Valued?
Jacobs Solutions Inc. valuation review using P/E, fair value, revenue growth, EPS growth, net margin, and TGMCharts chart exhibits as of July 10, 2026.
By TGMCharts Research · Data as of · Updated
The valuation framework for Jacobs Solutions Inc. requires balancing a trailing earnings multiple of 38.72x against an independent analyst DCF (FMP) reference price of $106. Determining whether this pricing is sustainable depends on whether long-term expansion and underlying margins can support the premium.
A comprehensive fundamental review reveals that the company's five-year revenue CAGR stands at -0.59% while its five-year EPS CAGR has contracted to -3.81%. With a net margin of 2.92%, these metrics test whether the market's current pricing multiple is fundamentally justified or structurally stretched.
- Jacobs Solutions Inc. concluded trading at $126 on the observation date of July 10, 2026.
- The equity carries a trailing P/E ratio of 38.72x and a price-to-sales multiple of 1.14x.
- The third-party analyst DCF (FMP) fair value is calculated at $106, yielding a margin of safety of -15.54%.
- Long-term growth indicators show a five-year revenue CAGR of -0.59% and a five-year EPS CAGR of -3.81%.
- The firm's current earnings yield is 2.58% against a net profit margin of 2.92%.
Valuation Setup
The market price, model anchor, growth support, and profitability facts behind the valuation read.
Evaluating the Fundamental Burden of Proof for Jacobs
When assessing the investment profile of Jacobs Solutions Inc., market participants must address a central valuation hurdle: does the underlying operational performance justify the premium multiple currently priced into the equity? As of July 10, 2026, the stock closed at $126, which translates to a trailing price-to-earnings ratio of 38.72x. This market price sits above the independent analyst-DCF (FMP) reference model, resulting in an implied margin of safety of -15.54%.
Evaluating this position requires looking beyond a single isolated ratio. A disciplined analysis demands that we synthesize the trailing P/E, independent fair value estimates, price-to-sales, and earnings yield alongside realized top-and-bottom-line growth. If these operational indicators align, the valuation has a solid foundation; if they diverge, the risk of multiple compression increases.
Decoupling the Market Price from Underlying Earnings Power
To understand what investors are paying for the business, we must evaluate the current pricing structure in its entirety. The market currently values the firm at a price-to-sales multiple of 1.14x, which corresponds to an earnings yield of 2.58%. By evaluating the historical relationship between the share price, the P/E multiple, and the sales ratio, we gain a clearer picture of whether the market is pricing in optimistic future assumptions or standard cyclical fluctuations.
J P/E ratio Chart
The trailing earnings multiple is the main valuation exhibit because it connects the market price to reported earnings.
Latest P/E ratio: 38.72x as of July 10, 2026.
A P/E ratio of 38.72x has to be judged against the company's five-year EPS CAGR of -3.81%. If the multiple is high while EPS support is ordinary, the valuation thesis becomes more dependent on investor confidence than on fresh earnings power.
J price-to-sales Chart
Price-to-sales gives a second valuation lens when margins and earnings can move around the cycle.
Latest price-to-sales ratio: 1.14x.
Price-to-sales at 1.14x is most useful beside net margin of 2.92%. A richer sales multiple is easier to defend when margin quality is durable rather than temporarily elevated.
The Disconnect Between Market Pricing and Independent DCF Models
An objective benchmark is provided by the analyst DCF (FMP) model, which establishes an independent valuation reference of $106. With the market price trading above this level, the margin of safety stands at -15.54%. Rather than treating this calculation as an absolute truth, analysts should view it as a key risk metric, comparing it against the broader scenario bands available on the dedicated DCF platform.
The valuation at a glance
Each input on its own line: what the stock costs against earnings and sales, the model's fair value and how far price sits from it, and the growth and margins behind the business.
J earnings yield Chart
Earnings yield reframes valuation from an owner's-yield perspective rather than a multiple perspective.
Latest earnings yield: 2.58%.
The earnings yield of 2.58% is the counterweight to the P/E ratio. If the yield is thin relative to the quality and growth profile, the valuation case needs more help from future compounding.
Long-Term Growth Trends Fail to Support Multiple Expansion
A premium valuation multiple is typically justified by robust business expansion, yet the company's long-term growth trajectory presents a challenging picture. Over the past five years, the annualized revenue CAGR has declined by -0.59%, while the five-year annualized EPS CAGR has contracted by -3.81%. This divergence suggests that the current stock price is being driven more by multiple expansion and investor sentiment than by actual fundamental growth.
J revenue
Revenue history tests whether the valuation is being supported by real business expansion.
Five-year revenue CAGR: -0.59%. This is endpoint-to-endpoint from the fiscal years shown — a depressed start year can inflate it, so read it against the recent bars.
Revenue growth is the business-expansion evidence behind the valuation read. A five-year revenue CAGR of -0.59% helps show how much of the valuation story is coming from company growth instead of only multiple expansion.
J EPS
EPS history checks whether reported earnings are keeping pace with the market multiple.
Five-year EPS CAGR: -3.81%. This is endpoint-to-endpoint from the fiscal years shown — a depressed or negative start year can inflate it, so read it against the recent bars.
A five-year EPS CAGR of -3.81% is the clearest support figure for a P/E-based conclusion. If EPS growth slows while the multiple remains elevated, the article should become more cautious after refresh.
Analyzing Profitability in Relation to Sales Valuation
Operating margins provide the critical bridge between top-line sales and bottom-line earnings power. The company currently generates a net profit margin of 2.92% against its price-to-sales ratio of 1.14x. In an environment where top-line growth is constrained, maintaining high margin quality is essential to defend a premium multiple. Any future compression in profitability would directly threaten the current valuation framework.
J net margin
Net margin shows whether the company has enough profitability quality to support its valuation.
Net margin (TTM): 2.92%. The bars below are annual fiscal years.
Net margin of 2.92% is a quality signal, not a valuation verdict by itself. It matters because a premium multiple is more defensible when margins are structurally strong and less defensible when margins are peaking.
The Tension Between Premium Multiples and Operational Realities
The optimistic case for the equity relies on a structural turnaround where revenue and earnings growth accelerate rapidly to validate the current trailing P/E. Conversely, the cautious view highlights that a P/E multiple of 38.72x and a negative margin of safety of -15.54% leave very little room for operational missteps, especially given the negative five-year annualized growth rates.
Bull and bear case
Valuation support
- Five-year revenue CAGR of -0.59% and five-year EPS CAGR of -3.81% support the business case.
- Net margin of 2.92% is the quality check behind the multiple.
Valuation pressure
- A P/E ratio of 38.72x can become demanding if EPS growth slows.
- The analyst-DCF (FMP) margin of safety at -15.54% should change the valuation read if it deteriorates after refresh.
Key Operational Signposts to Monitor
The prevailing valuation thesis would be fundamentally altered by several key developments. A narrowing of the gap between the market price and the analyst-DCF (FMP) reference of $106 would reset the margin of safety. Additionally, a sustained recovery in the five-year EPS CAGR or a meaningful improvement in the net profit margin would provide the fundamental support that the current market multiple requires.
Synthesizing the Fundamental Valuation Outlook
In conclusion, Jacobs Solutions Inc. presents a valuation profile where the market price is running ahead of historical growth trends. For the current valuation to hold, the company must demonstrate a clear path to reversing its negative five-year growth rates while protecting its net profit margin of 2.92%. All data points in this analysis are derived from verified financial filings and should be used as general research context rather than personalized financial advice.
FAQ
Is J fairly valued?
Jacobs Solutions Inc. trades at 38.72x trailing earnings with an analyst-DCF (FMP) margin of safety of -15.54%. The cleanest read comes from comparing that valuation to five-year revenue CAGR of -0.59% and five-year EPS CAGR of -3.81%.
What valuation metric matters most for J?
This article anchors on P/E, fair value, margin of safety, price-to-sales, earnings yield, revenue growth, and EPS growth. No single metric is treated as a recommendation.
How often should this J valuation view refresh?
We refresh this note after each daily market close, so the price, fair value, and every figure stay current. Numbers here are as of July 10, 2026.
What would change our mind
- Any significant divergence of the market price from the independent analyst-DCF (FMP) baseline of $106.
- A further shift in the five-year EPS CAGR, which currently registers at -3.81%.
- Profitability fluctuations relative to the current net margin of 2.92%.
The bottom line
Jacobs Solutions Inc. fundamental valuation assessment analyzing market multiples against five-year growth trajectories and independent DCF reference points.
Read next: J fundamentalsContinue with Jacobs Solutions Inc.'s full stock page.How we checked this researchShowHide
Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-Q · filed 2026-05-05 · period 2026-03-27 · SEC EDGAR source
- “Our results were also impacted by a $37.5 million increase in the Company's redeemable noncontrolling share of expense associated with equity-based incentive grants compared to the prior year period as mentioned above, partly offset by higher net earnings results in our PA Consulting segment.”
- “Our results were also impacted by a $38.8 million increase in the Company's redeemable noncontrolling share of expense associated with equity-based incentive grants compared to the prior year period as mentioned above, partly offset by higher net earnings results in our PA Consulting segment.”
- “As such, the financial results of the SpinCo Business are reflected in our Consolidated Statements of Earnings as discontinued operations for all periods presented.”
- “Revenue increases for both the three and six month periods year over year were mainly driven by the Company's I&AF business, as well as year-over-year revenue growth in our PA Consulting business.”
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Every numeric or dated claim in this note was checked against our stored company data before publishing — each figure below links to the page it comes from.