H&R Block (HRB) AI Stock Analysis

• Market Cap: $7.32B
• Dividend Yield: 2.75%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 13.5
• Beta (1Y): 0.19
• Revenue Growth: 3.71%
• EPS Growth: -8.07%
• Country: US
• Employees: 4,200
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Personal Products & Services
• EPS (TTM): 5.38
• Shares Outstanding: 133,880,420
• 10 Day Avg. Volume: 964,309
• 30 Day Avg. Volume: 1,050,599
• PEG Ratio: 0.86
• Price to Book (P/B): 85.74
• Price to Sales (P/S): 2.15
• P/FCF Ratio: 11.82
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 2.31
• Enterprise Value/Gross Profit: 5.18
• Enterprise Value/Ebitda: 8.92
• 1Y Price Target: $70.00
• Price Target Upside: 28.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 54 Neutral
• Price Target: $57.00 ▲(4.32% Upside)

H&R Block faces significant financial challenges, as indicated by poor financial health with negative profitability and cash flow. However, the recent earnings call showed positive operational developments, and the company has managed to secure financial flexibility through its extended credit facility. The valuation remains moderate, providing some attractiveness to investors.

Positive Factors

Financial Performance

H&R Block reported financial results that topped expectations and full-year guidance was reaffirmed, indicating confidence in the company's future performance.

Shareholder Returns

An aggressive share repurchase program and a secure dividend yield support the reiteration of the OUTPERFORM investment rating and the 12-month price target of $70.

Valuation

The stock is trading at a discount compared to both its five-year average and its industry peers, suggesting potential for price appreciation.

Negative Factors

Legal Expenses

Management expects EBITDA to be slightly below the midpoint of the guidance range due to higher-than-anticipated legal fees and settlements.

Profitability

The adjusted loss per share increased 36.2% from the previous year, indicating a decline in profitability.

H&R Block Business Overview & Revenue Model

Company Description

H&R Block, Inc. is a leading provider of tax preparation services, operating within the consumer services sector. The company offers a range of products and services designed to assist individuals and small businesses with their tax needs. Its core services include in-person tax preparation at retail locations, DIY online tax filing options, and tax software products. Additionally, H&R Block provides financial services such as refund transfers and peace of mind extended service plans.

How the Company Makes Money

H&R Block generates revenue primarily through fees charged for its tax preparation services. These services are offered both in-person at retail locations and online through their digital platforms. The company earns money from the sale of DIY tax preparation software and online filing services. Additionally, H&R Block generates revenue through its financial services offerings, which include refund transfers and the sale of service plans that provide audit support and other benefits. Strategic partnerships with financial institutions and marketing collaborations also contribute to its earnings by enhancing the range of services and customer reach.

H&R Block Financial Statement Overview

Summary

H&R Block's financial health has deteriorated significantly with negative profitability and cash flow, coupled with high leverage and negative equity. The recent financials indicate significant challenges that could impact future stability.

Income Statement

The income statement shows a concerning trajectory with a recent shift to negative profitability for TTM. Gross Profit Margin decreased significantly in the TTM period, and Net Profit Margin became negative, indicating financial strain. Historical revenue growth was positive but inconsistent, with a notable decline in the latest TTM data. EBIT and EBITDA margins have also deteriorated significantly, highlighting challenges in maintaining operational efficiency and profitability.

Balance Sheet

The balance sheet reflects financial stress, with negative Stockholders' Equity in the TTM period, indicating potential solvency issues. The Debt-to-Equity Ratio is not meaningful due to negative equity. Return on Equity is also not applicable for the TTM period. Historical data shows fluctuating equity levels, with recent years showing some stability before the TTM downturn. However, the high leverage poses a risk to financial stability.

Cash Flow

Cash flow analysis indicates a recent deterioration in cash generation, with negative Free Cash Flow and Operating Cash Flow in the TTM period. The Operating Cash Flow to Net Income ratio highlights operational challenges, as both metrics turned negative. Historically, the company had positive cash flow generation, but the recent downturn indicates significant liquidity challenges that need to be addressed.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.71B	3.61B	3.47B	3.46B	3.41B	2.64B
Gross Profit	1.65B	1.62B	1.55B	1.58B	1.57B	927.44M
EBITDA	959.91M	963.19M	914.69M	889.53M	932.46M	262.26M
Net Income	564.15M	595.32M	553.70M	553.67M	583.79M	-7.53M
Balance Sheet
Total Assets	3.25B	3.22B	3.07B	3.27B	3.65B	5.11B
Cash, Cash Equivalents and Short-Term Investments	772.95M	1.08B	1.02B	1.05B	1.06B	2.88B
Total Debt	1.92B	1.96B	1.93B	1.92B	1.94B	4.00B
Total Liabilities	3.44B	3.13B	3.04B	3.06B	3.30B	5.04B
Stockholders Equity	-192.84M	90.59M	32.06M	211.63M	352.40M	71.04M
Cash Flow
Free Cash Flow	648.29M	657.18M	752.14M	746.58M	573.14M	27.28M
Operating Cash Flow	729.92M	720.86M	821.84M	808.54M	625.93M	108.96M
Investing Cash Flow	-105.11M	-93.86M	-101.39M	-76.54M	-45.52M	-470.23M
Financing Cash Flow	-639.31M	-564.31M	-750.99M	-1.26B	-2.41B	1.53B

H&R Block Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 54.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRB, the sentiment is Negative. The current price of 54.64 is below the 20-day moving average (MA) of 55.54, below the 50-day MA of 55.83, and below the 200-day MA of 55.78, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 45.52 is Neutral, neither overbought nor oversold. The STOCH value of 23.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRB.

H&R Block Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTDR	78 Outperform	$0.00	16.61	109.83%	―	5.53%	36.30%
SCI	78 Outperform	$11.05B	21.30	34.52%	1.59%	2.65%	7.42%
CSV	75 Outperform	$714.19M	15.22	22.96%	0.99%	5.02%	45.34%
BFAM	73 Outperform	$6.73B	43.09	12.63%	―	9.71%	94.22%
MCW	64 Neutral	$1.84B	21.85	8.62%	―	7.21%	20.31%
Sector *	61 Neutral	$16.54B	10.12	-9.01%	3.34%	1.45%	-22.43%
HRB	54 Neutral	$7.32B	13.46	657.13%	2.75%	3.71%	-8.07%

H&R Block Corporate Events

H&R Block Extends Credit Facility to 2030

On July 11, 2025, Block Financial LLC, a subsidiary of H&R Block, Inc., entered into the Fifth Amended and Restated Credit and Guarantee Agreement, extending the maturity date of its credit facility to July 11, 2030, while maintaining a principal amount of $1.5 billion. This amendment reflects H&R Block’s strategic financial management, potentially enhancing its financial stability and operational flexibility, with no significant changes to the material terms of the previous agreement.

The most recent analyst rating on (HRB) stock is a Sell with a $44.00 price target. To see the full list of analyst forecasts on H&R Block stock, see the HRB Stock Forecast page.