Jacobs Solutions (J) Down 3.6% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Jacobs Solutions (J). Shares have lost about 3.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Jacobs Solutions due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Jacobs Q1 Earnings & Revenues Top, Both Up Y/Y, FY26 View Raised

Jacobs Solutions Inc. reported stellar first-quarter fiscal 2026 (ended Dec. 26, 2025) results, with adjusted earnings and revenues beating the Zacks Consensus Estimate and growing year over year.

The quarterly results reflect strong contributions from both the reportable segments, Infrastructure & Advanced Facilities and PA Consulting. Stronger performance in the life sciences, data center, semiconductor, water and transportation sectors, alongside increased demand for digital consulting services, bolstered the quarter’s uptrend. Moreover, the favorable impact of foreign currency translation was an additional tailwind.

With the announcement of acquiring the remaining stake in PA Consulting and favorable market fundamentals, Jacobs is optimistic about its performance in the remaining fiscal 2026. Besides, a 12.5% hike (to 35 cents per share) in quarterly dividend payment is expected to encourage investors’ sentiments.

Inside Jacobs’ Q1 Results

The company reported adjusted earnings per share (EPS) of $1.53, which topped the Zacks Consensus Estimate of $1.52 by 0.7%. In the year-ago quarter, it reported an adjusted EPS of $1.33.

Jacobs’ gross revenues of $3.29 billion also surpassed the consensus mark of $3.18 billion by 3.5% and grew 12.3% year over year. Adjusted net revenues of $2.25 billion were also up 8.2% year over year.

Adjusted operating profit grew 8.2% to $299.6 million from a year ago. Adjusted operating margin remained flat year over year at 13.3%. Adjusted EBITDA was $302.6 million (up 7.3% year over year), with a margin of 13.4%, down 10 basis points (bps) from a year ago.
Fiscal first-quarter end backlog increased 20.6% year over year to $26.3 billion, underpinned by strong project wins. The book-to-bill ratio was 1.4x in the trailing 12-month period, highlighting robust demand and future revenue stability.

Jacobs’ Segment Details

Infrastructure & Advanced Facilities (IA&F): This segment’s revenues totaled $2.94 billion, which increased 12% year over year from $2.6 billion. Adjusted net revenues (excluding Pass-Through revenues) were $1.9 billion, up 6.9% year over year. Its operating profit was up 2.4% from the prior-year quarter to $214.7 million and the margin contracted 50 bps to 11.3%, due to increased selling, general and administrative expenses.

The backlog at the quarter’s end was $25.9 billion, up from $21.48 billion a year ago.

The Critical Infrastructure business also delivered growth during the quarter, with gross revenues rising 6.5% year over year to $1.16 billion. The Life Sciences and Advanced Manufacturing business also witnessed 31.3% year-over-year growth in its gross revenues to $952 million. Also, the Water & Environmental business witnessed growth in its gross revenues by 1.7% year over year to $825 million.

PA Consulting: The segment generated $354.4 million in revenues, which were up 15.5% from $306.7 million reported in the year-ago quarter.

Its operating profit was $84.9 million, up 27.3% from a year ago, with the margin expanding 220 bps to 27.2%. The quarter-end backlog amounted to $406 million, up from $331 million a year ago.

Jacobs’ Balance Sheet & Cash Flow

At the fiscal first-quarter end, Jacobs had cash and cash equivalents of $1.55 billion, up from $1.24 billion at the fiscal 2025 end (Sept. 26, 2025). Long-term debt increased to $2.49 billion as of Dec. 26, 2025, from $2.24 billion at the fiscal 2024-end.

Net cash provided by operating activities totaled $380.8 million in the first three months of fiscal 2026 compared with $107.5 million in the comparable year-ago period. In the same time frame, the free cash flow was $364.9 million, notably up from $97.1 million a year ago.

Jacobs Raises Fiscal 2026 Guidance

Adjusted net revenues are now expected to grow year over year between 6.5% and 10% (previously projected to grow between 6% and 10%). Adjusted EPS is now expected to be between $6.95 and $7.30, up from the previous expectation of $6.90-$7.30. Adjusted EBITDA margin is still expected to be between 14.4% and 14.7%.

The company expects free cash flow margin to range from 7% to 8.5% (previously projected to grow between 7% and 8%). Capital expenditures are expected to be about 1% of its consolidated revenues.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Jacobs Solutions has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jacobs Solutions has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Jacobs Solutions belongs to the Zacks Building Products - Miscellaneous industry. Another stock from the same industry, United Rentals (URI), has gained 0.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

United Rentals reported revenues of $4.21 billion in the last reported quarter, representing a year-over-year change of +2.8%. EPS of $11.09 for the same period compares with $11.59 a year ago.

United Rentals is expected to post earnings of $9.04 per share for the current quarter, representing a year-over-year change of +2%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.3%.

United Rentals has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

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This article originally published on Zacks Investment Research (zacks.com).

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