H&R Block (HRB) AI Stock Analysis

• Market Cap: $3.80B
• Dividend Yield: 3.67%
• Average Volume (3M): 2.80M
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.26
• Revenue Growth: 4.15%
• EPS Growth: 8.13%
• Country: US
• Employees: 4,200
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): -1.84
• Shares Outstanding: 126,759,735
• 10 Day Avg. Volume: 3,332,376
• 30 Day Avg. Volume: 2,800,882
• PEG Ratio: 1.49
• Price to Book (P/B): 82.71
• Price to Sales (P/S): 1.95
• P/FCF Ratio: 12.28
• Enterprise Value/Market Cap: 1.77
• Enterprise Value/Revenue: 1.78
• Enterprise Value/Gross Profit: 3.25
• Enterprise Value/Ebitda: 6.81
• 1Y Price Target: $41.00
• Price Target Upside: 34.34% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 4.97
• Revenue Forecast (FY): $3.89B

• Rating: 63 Neutral
• Price Target: $31.00 ▲(1.57% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is driven primarily by mixed fundamentals: strong profitability and cash generation are offset by elevated balance-sheet risk (high leverage and negative equity). Valuation is a clear positive (low P/E and high dividend yield), while technical signals remain bearish with the stock in a pronounced downtrend despite oversold readings. Earnings call commentary supports the outlook via reaffirmed guidance and continued capital returns, but execution and early-season uncertainty temper confidence.

Positive Factors

Cash generation

Consistent high free cash flow conversion (~87% of net income TTM) indicates the business reliably converts earnings into cash. This supports sustained investment, dividends and buybacks over multiple years, giving management flexibility to fund AI, operations, and shareholder returns without needing structural financing changes.

Margins and earnings power

Sustained net margins around 16% reflect durable profitability from a mix of assisted and DIY tax services. Stable margins support predictable EBITDA and operating cash flow through seasonality, underpinning long-term earnings power as the firm invests in automation and preserves core service economics.

Disciplined capital returns

Large, disciplined capital returns (>$500M returned with substantial buyback capacity remaining) demonstrate strong cash allocation priorities. This pattern signals management confidence in cash generation and commitment to shareholders, and can sustainably support shareholder value absent major balance-sheet shocks.

Negative Factors

Elevated balance-sheet risk

High leverage and a shift to negative equity in trailing twelve months materially reduce financial flexibility. Elevated debt amplifies downside in a slow revenue environment, constrains strategic M&A or large capex, and increases refinancing and interest-rate sensitivity over the medium term.

Assisted-channel execution risk

Persistent execution issues in the assisted channel—manual workflows and mid/lower-funnel losses—threaten client retention and lifetime value. Remediation is multi-year; until AI and process fixes scale, revenue mix and margins could be pressured by higher operating costs and slower share recovery.

Weakening cash-flow momentum

Although FCF conversion stays high, recent declines and timing-driven operating cash variability suggest working-capital or seasonality pressures. If momentum does not recover, it limits spare cash for investments or buybacks and raises the importance of preserving liquidity amid elevated leverage.

H&R Block Business Overview & Revenue Model

Company Description

H&R Block, Inc., through its subsidiaries, provides assisted income tax return preparation and do-it-yourself (DIY) tax return preparation services and products to the general public primarily in the United States, Canada, and Australia. The company offers assisted income tax return preparation and related services through a system of retail offices operated directly by the company or its franchisees. It also provides Refund Transfers and H&R Block Emerald Prepaid Mastercard, which enables clients to receive their tax refunds; Peace of Mind extended service plans; H&R Block Emerald Advance lines of credit; Tax Identity Shield that provides clients assistance in helping protect their tax identity and access to services to help restore their tax identity; refund advance loans; H&R Block Instant Refund; and H&R Block Pay With Refund services. In addition, the company offers small business financial solutions through its company-owned or franchise offices, and online. H&R Block, Inc. was founded in 1955 and is headquartered in Kansas City, Missouri.

How the Company Makes Money

H&R Block generates revenue primarily through its tax preparation services, which include both in-person and online filing options. The company charges clients a fee for preparing their federal and state tax returns, with pricing varying based on the complexity of the return. Key revenue streams include retail tax preparation, online tax software sales, and the sale of additional services such as refund anticipation loans and audit support. Additionally, H&R Block offers other financial services, including bookkeeping for small businesses and personal finance tools, which contribute to its earnings. The company also benefits from strategic partnerships, such as collaborations with financial institutions for offering tax-related financial products, further enhancing its revenue potential.

H&R Block Financial Statement Overview

Summary

Profitability and cash conversion are solid (net margin ~16% and free cash flow ~87% of net income TTM), but the balance sheet is a major constraint with high leverage and negative equity in TTM, reducing financial flexibility. Recent free cash flow decline and an unusually large TTM revenue jump also add durability risk.

Income Statement

HRB shows solid profitability with consistently strong margins (net margin ~16% across the annual periods, and ~16% in TTM (Trailing-Twelve-Months)). Revenue has been relatively steady with modest growth in recent annual reports (~4% range), while TTM (Trailing-Twelve-Months) shows a sharp revenue jump (52.5%), which is a positive but unusual step-up that may prove volatile. Overall, earnings power looks durable, but top-line consistency and the sustainability of the TTM growth rate are key watch items.

Balance Sheet

Balance sheet risk is elevated: leverage is high and equity is thin—moving from small positive equity in the annual reports to negative equity in TTM (Trailing-Twelve-Months). That shift drives a negative debt-to-equity and negative return on equity in TTM (Trailing-Twelve-Months), signaling a weaker capital position despite stable operating profitability. While total assets are sizable, the combination of high debt and limited/negative equity reduces financial flexibility and raises downside risk.

Cash Flow

Cash generation is a strength: free cash flow remains substantial and tracks net income reasonably well (free cash flow running at ~87% of net income in TTM (Trailing-Twelve-Months), and ~88–92% in the last several annual periods). However, momentum has softened with free cash flow declining recently (negative growth in the most recent annual period and in TTM (Trailing-Twelve-Months)). Operating cash flow coverage is mixed—healthy in some years but weaker in the latest annual period—suggesting periodic working-capital or timing swings.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Apr 2021
Income Statement
Total Revenue	3.79B	3.76B	3.61B	3.47B	3.46B	3.46B
Gross Profit	2.07B	1.67B	1.62B	1.55B	1.58B	1.58B
EBITDA	989.43M	976.34M	963.19M	914.69M	889.53M	889.53M
Net Income	613.78M	605.77M	595.32M	553.70M	553.67M	553.67M
Balance Sheet
Total Assets	2.93B	3.26B	3.22B	3.07B	3.27B	3.65B
Cash, Cash Equivalents and Short-Term Investments	368.86M	1.00B	1.08B	1.02B	1.05B	1.06B
Total Debt	3.23B	2.35B	2.23B	2.18B	2.15B	2.18B
Total Liabilities	3.75B	3.18B	3.13B	3.04B	3.06B	3.30B
Stockholders Equity	-823.08M	88.90M	90.59M	32.06M	211.63M	352.40M
Cash Flow
Free Cash Flow	524.08M	598.85M	657.18M	752.14M	746.58M	573.14M
Operating Cash Flow	605.73M	680.88M	720.86M	821.84M	808.54M	625.93M
Investing Cash Flow	-109.81M	-105.37M	-93.86M	-101.39M	-76.54M	-45.52M
Financing Cash Flow	-476.50M	-647.44M	-564.31M	-750.99M	-1.26B	-2.41B

H&R Block Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 30.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 30.52 is below the 20-day moving average (MA) of 33.10, below the 50-day MA of 38.91, and below the 200-day MA of 48.08, indicating a bearish trend. The MACD of -2.78 indicates Negative momentum. The RSI at 35.10 is Neutral, neither overbought nor oversold. The STOCH value of 38.91 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	72 Outperform	$4.01B	16.02	91.16%	―	11.88%	18.08%
MCW	66 Neutral	$2.29B	22.58	8.84%	―	6.98%	22.81%
SCI	65 Neutral	$11.22B	21.20	32.72%	1.66%	3.41%	7.94%
HRB	63 Neutral	$3.80B	6.91	―	3.67%	4.15%	8.13%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BFAM	61 Neutral	$4.05B	21.53	14.75%	―	9.38%	74.27%
CSV	59 Neutral	$700.98M	14.31	21.96%	1.06%	0.99%	37.55%

H&R Block Corporate Events

H&R Block Expands Board With Three New Independent Directors

On January 20, 2026, H&R Block expanded its Board of Directors from eight to eleven members and appointed three new independent directors, Geralyn R. Breig, Christian H. Charnaux, and Stephanie C. Plaines, with the company formally announcing the move on January 22, 2026. The new directors, who bring significant experience in consumer brands, large-scale organizational growth, and financial leadership from prior roles at companies including Revlon, Hilton, Inspire Brands, JCPenney, Starbucks, and Jones Lang LaSalle, have been assigned to key Board committees, including Audit, Compensation, and Governance and Nominating. Their appointments, accompanied by standard non-employee director compensation and indemnification arrangements, are intended to strengthen H&R Block’s strategic capabilities, support its multi-year growth initiatives, and enhance board succession planning as the company focuses on elevating client experiences and scaling its service delivery platforms.

The most recent analyst rating on (HRB) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on H&R Block stock, see the HRB Stock Forecast page.