Timing is Everything: The Big Bounce for Jackson Hewitt (JTX)

Parsippany, NJ-based Jackson Hewitt Tax Service Inc. (JTX) adds to the companies beating Wall Street analyst 2nd quarter earnings estimates this week.

JTX said that its Q4 net income rose to $48.1 million, or $1.67 per share, from $41.3 million, or $1.45 a share, in the year-ago period. Analysts had been expecting earnings of $1.03 a share, according to data compiled by FactSet.

JTX shares have traded in a range of $.93 cents to $7.11 in the past 52 weeks. The key for traders and investors has been knowing when to hold ’em and when to fold ’em. On Monday, July 12th, JTX was trading at $1 per share. Three days later, JTX stock is trading at $1.50 per share, or a 50% increase.

The sore spot lies in the revenue report, yet still better than analyst expectations. Revenue fell 11 percent to $125.6 million from $141.2 million last year. Analysts expected lower revenue of $120.3 million.

On March 1st of this year, I covered the three major players prior to tax season in my article titled, “Tax Season: Which Companies Will Win?” I noted that Jackson Hewitt presented the contrarian highest risk-highest reward pullback opportunity for investors. Jackson Hewitt was the weakest of the 3 big competitors at the time and still needs to repair its ugly balance sheet and financial statement in order for it to meet the standards of our Wall St. Cheat Sheet investing & trading framework qualifications.

Disclosure: No positions in the companies mentioned.

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