Jack in the Box Inc. (JACK): A Bull Case Theory

Insider Monkey
03-18

We came across a bullish thesis on Jack in the Box Inc. (JACK) on Substack by Christopher Kirincic. In this article, we will summarize the bulls’ thesis on JACK. Jack in the Box Inc. (JACK)'s share was trading at $31.34 as of March 14th. JACK’s trailing and forward P/E were 9.05 and 6.12 respectively according to Yahoo Finance.

A close-up of a burger on a grill with steam rising in the background.

Jack in the Box (JACK) is an undervalued opportunity with substantial upside potential in 2025. The stock, which traded at $86 in 2024 at 14x its $6.20 EPS, is now priced at half that valuation despite management executing a clear expansion strategy and investing in margin improvements. JACK’s disciplined capital allocation is a key strength, as the company consistently returns excess cash to shareholders through aggressive buybacks while also offering a compelling 4.7% dividend yield. The company’s operational focus on driving efficiency and improving profitability further strengthens the investment case.

Despite the current valuation disconnect, JACK’s earnings power remains intact, with low-end EPS estimates supporting significant appreciation potential. If the stock rerates closer to its historical valuation, it could easily double or even triple from current levels. The combination of margin expansion, steady earnings growth, and capital returns creates an attractive risk/reward setup.

Jack in the Box Inc. (JACK) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held JACK at the end of the third quarter which was 16 in the previous quarter. While we acknowledge the risk and potential of JACK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than JACK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.

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