A month has gone by since the last earnings report for Jefferies (JEF). Shares have lost about 4.5% in that time frame, underperforming the S&P 500.

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

Jefferies Q4 Earnings & Revenues Beat as IB Business Rebounds, Expenses Up

Jefferies’ fourth-quarter fiscal 2024 (ended Nov. 30) adjusted earnings from continuing operations of $1.05 per share surpassed the Zacks Consensus Estimate of 98 cents. The bottom line compared favorably with the prior-year quarter’s 30 cents.

Results benefited from solid improvement in IB business and higher capital markets revenues. The performance of the reportable segments was also strong. However, an increase in non-interest expenses was an undermining factor.

Net income attributable to common shareholders (GAAP basis) was $205.7 million, jumping significantly from $65.6 million in the prior-year quarter.

For fiscal 2024, adjusted earnings from continuing operations were $3.39 per share, which beat the consensus estimate of $3.20 and grew substantially from $1.30 in fiscal 2023. Net income attributable to common shareholders (GAAP basis) was $669.3 million, surging significantly from $260.9 million in the prior year.

Revenues Jump, Expenses Rise

Quarterly net revenues were $1.96 billion, surging 63.4% year over year. The top line also beat the Zacks Consensus Estimate of $1.84 billion.

In fiscal 2024, net revenues jumped 49.7% to $7.03 billion. The top line also outpaced the consensus estimate of $6.93 billion.

Total non-interest expenses were $1.65 billion, up 48.8% from the prior-year quarter. The rise was due to an increase in almost all cost components.

As of Nov. 30, 2024, book value per common share was $49.42, up from $46.10 as of Nov. 30, 2023. Further, adjusted tangible book value per fully diluted share of $32.36 increased from $30.82.

Quarterly Segment Performance

Investment Banking and Capital Markets: Net revenues were $1.64 billion, jumping 54.9% from the prior-year quarter. The rise was driven by solid performance across advisory and equity and debt underwriting businesses, along with a robust performance in Equities and Fixed Income.

Asset Management: Net revenues were $314.5 million, rising substantially from the year-ago quarter’s $140.6 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -8.09% due to these changes.

VGM Scores

Currently, Jefferies has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated 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 D. 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, Jefferies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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