As of October 20, 2025, Jacobs Engineering Group Inc's estimated intrinsic value ranges from $17.36 to $190.51 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $190.51 | +22.6% |
| Discounted Cash Flow (5Y) | $149.86 | -3.6% |
| Dividend Discount Model (Multi-Stage) | $130.41 | -16.1% |
| Dividend Discount Model (Stable) | $17.36 | -88.8% |
| Earnings Power Value | $90.62 | -41.7% |
Is Jacobs Engineering Group Inc (J) undervalued or overvalued?
With the current market price at $155.39, the stock appears to be moderately overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Jacobs Engineering Group Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.91 | 1.08 |
| Cost of equity | 8.1% | 10.9% |
| Cost of debt | 4.9% | 7.0% |
| Tax rate | 17.8% | 19.6% |
| Debt/Equity ratio | 0.12 | 0.12 |
| After-tax WACC | 7.6% | 10.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $150 | $19,129M | 76.0% |
| 10-Year Growth | $191 | $23,989M | 57.7% |
| 5-Year EBITDA | $212 | $26,586M | 82.7% |
| 10-Year EBITDA | $244 | $30,436M | 66.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,056M |
| Discount Rate (WACC) | 10.3% - 7.6% |
| Enterprise Value | $10,235M - $13,860M |
| Net Debt | $1,215M |
| Equity Value | $9,020M - $12,645M |
| Outstanding Shares | 120M |
| Fair Value | $75 - $106 |
| Selected Fair Value | $90.62 |
| Metric | Value |
|---|---|
| Market Capitalization | $18575M |
| Enterprise Value | $19791M |
| Trailing P/E | 111.17 |
| Forward P/E | 23.26 |
| Trailing EV/EBITDA | 15.75 |
| Current Dividend Yield | 83.67% |
| Dividend Growth Rate (5Y) | -0.21% |
| Debt-to-Equity Ratio | 0.12 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $57.15 |
| Discounted Cash Flow (5Y) | 25% | $37.46 |
| Dividend Discount Model (Multi-Stage) | 20% | $26.08 |
| Dividend Discount Model (Stable) | 15% | $2.60 |
| Earnings Power Value | 10% | $9.06 |
| Weighted Average | 100% | $132.37 |
Based on our comprehensive valuation analysis, Jacobs Engineering Group Inc's intrinsic value is $132.37, which is approximately 14.8% below the current market price of $155.39.
Key investment considerations:
Given these factors, we believe Jacobs Engineering Group Inc is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.