Jackson Hewitt: Is There Value in the Current Stock Price?

Jackson-Hewitt Tax Service (JTX) is the second largest "brick-and-mortar" tax preparation firm, trailing only H&R Block (HRB) in returns filed. The company operates primarily on a franchising model, where franchisees open locations and pay royalty and advertising fees back to the parent, although recently the company has moved towards more company-owned stores, as a large franchisee came under DOJ investigation for tax fraud in 2007, hurting the brand name.

Historically, Jackson-Hewitt has focused on lower income filers, which are more likely to use physical locations instead of online software, and also are more likely to get a refund anticipation loan [RAL], which come with huge interest rates if they are not paid off quickly.