Buy or Fear Jabil Stock?
Jabil (NYSE: JBL) has been one of 2025’s quiet outperformers — up about 40% year-to-date while the S&P 500 has gained just 18%. Demand from AI infrastructure and data center customers has been a major tailwind, and management sweetened the news with a new $1 billion share buyback. The stock popped again after the company posted a strong fiscal fourth quarter, beating Wall Street’s expectations on both revenue and earnings.
On the surface, it sounds like Jabil is in great shape. But peel back the layers, and the picture looks less perfect. Its fundamentals don’t quite support the hype. For now, this looks more like a stock to fear than to buy. We discuss more below.
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What You Pay: A Moderate Valuation
At roughly 0.8 times sales and 18.8 times free cash flow, Jabil isn’t priced like a hyper-growth stock. Its valuation appears moderate compared to the broader market, where the S&P 500 trades at approximately 3.3 times sales and 21 times free cash flow. That might make JBL appear inexpensive at first glance — but only if its fundamentals justify those multiples.
What You Get: Weak Growth Trends
Growth is where the story starts to wobble. Over the past three years, Jabil’s revenue has actually shrunk by about 3% annually. Over the last twelve months, sales grew 3% to $30 billion.
The most recent quarter did offer a glimmer of strength, with revenue up about 18% year-over-year, driven largely by AI and data center demand. Still, when you zoom out, the long-term trend is one of stagnation rather than expansion — especially compared to the S&P 500’s steady mid-single-digit growth over the same period.
Profitability: Very Weak
Profitability is Jabil’s weakest link. The company’s operating margin sits below 5%, and its net margin is just 2%, a far cry from the roughly 12% average seen across large U.S. companies. Even its operating cash flow margin, around 5.6%, trails the S&P’s average of over 20%.
In other words, Jabil’s ability to turn revenue into real profit is severely limited. That’s especially concerning in a business so tied to cyclical sectors like electronics and automotive manufacturing, where margins can evaporate quickly when demand slows.
Financial Stability: The Bright Spot
To its credit, Jabil’s balance sheet is solid. Debt stands at around $3 billion, well supported by a market cap of roughly $22 billion. Its debt-to-equity ratio near 15% is comfortably below the market average, and the company holds about $2 billion in cash, giving it a healthy 10% cash-to-assets ratio.
This financial cushion gives Jabil some flexibility to invest, repurchase stock, or weather short-term headwinds — though it doesn’t fix its structural profitability issues.
Downturn Resilience: Historically Weak
Jabil’s stock history tells a story of volatility. During the 2022 inflation shock, JBL fell about 29%, worse than the S&P 500’s 25% drop, though it bounced back faster. In the 2020 pandemic selloff, it plunged 57%, recovering only after nine months — again, a deeper hit than the market average. During the 2008 financial crisis, Jabil lost a staggering 89% of its value, taking nearly a decade to regain its pre-crisis levels. Read JBL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
Yes, it has always recovered — but those drawdowns highlight just how sensitive the stock is to economic cycles and supply chain disruptions.
Bottom Line
At face value, Jabil’s fundamentals don’t justify its rally. The valuation may be “moderate,” but it’s not cheap given the company’s weak growth, razor-thin margins, and uneven operating performance. Financial stability is a plus, but downturn resilience remains a clear weakness.
That’s why, despite the recent excitement around AI-driven demand and share buybacks, the stock looks unattractive from a risk-reward standpoint.
If you’re drawn to the AI manufacturing theme, Jabil might feel like a proxy play — but you’re still betting on a cyclical, low-margin business in an unpredictable global environment.
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