H&R Block (HRB) AI Stock Analysis

• Market Cap: $6.74B
• Dividend Yield: 2.99%
• Average Volume (3M): 1.60M
• Price to Earnings (P/E): 11.8
• Beta (1Y): 0.25
• Revenue Growth: 4.17%
• EPS Growth: 5.56%
• Country: US
• Employees: 4,200
• Sector: Consumer Cyclical
• Sector Strength: 79
• Industry: Personal Products & Services
• EPS (TTM): 2.27
• Shares Outstanding: 133,947,450
• 10 Day Avg. Volume: 2,588,218
• 30 Day Avg. Volume: 1,604,283
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 2.28
• Enterprise Value/Gross Profit: 5.11
• Enterprise Value/Ebitda: 8.80
• 1Y Price Target: $55.00
• Price Target Upside: 8.06% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 67 Neutral
• Price Target: $56.00 ▲(10.02% Upside)

H&R Block's overall stock score reflects a mixed outlook. Strong financial performance and strategic corporate events are offset by technical weaknesses and leverage risks. The company's valuation and earnings call sentiment are positive, but technical indicators suggest caution.

Positive Factors

Future Revenue Projections

The company's initial guidance for FY/26 projects revenue above FactSet consensus, indicating potential growth.

Investment Rating

The OUTPERFORM investment rating is reiterated, supported by an increased dividend yield of 3.3% and an aggressive share repurchase program.

Revenue Growth

H&R Block's fourth quarter revenues increased by 4.6% to $1.111 billion, surpassing both internal estimates and the FactSet consensus.

Negative Factors

Earnings Performance

Adjusted EPS for the fourth quarter fell short of estimates due to a higher-than-forecast tax rate, impacting earnings.

Legal Costs

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

Stock Valuation

Despite a lower price target, the stock is trading at a discount compared to its peers, suggesting potential value for investors.

H&R Block Business Overview & Revenue Model

Company Description

H&R Block, Inc. (HRB) is a leading provider of tax preparation and related services in the United States and internationally. Founded in 1955, the company operates through two primary segments: Tax Services and Financial Services. H&R Block offers a range of services, including in-person tax preparation, online tax filing software, and various financial products such as refund anticipation loans and tax-related identity theft protection. The company serves millions of clients annually, making it one of the most recognized brands in tax preparation.

How the Company Makes Money

H&R Block primarily generates revenue through its Tax Services segment, which accounts for the majority of its income. The company earns money by charging clients for tax preparation services, with pricing varying based on the complexity of the tax return and the services provided. Additionally, H&R Block generates revenue from its online tax filing software subscriptions and service fees for financial products like refund anticipation loans and other financial solutions. Seasonal demand during tax season significantly influences revenue, with most earnings concentrated in the first quarter of the calendar year. The company also benefits from strategic partnerships and collaborations with financial institutions and software providers, enhancing its service offerings and driving customer engagement.

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 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.71B	3.76B	3.61B	3.47B	3.46B	3.41B
Gross Profit	1.65B	1.67B	1.62B	1.55B	1.58B	1.57B
EBITDA	959.91M	976.34M	963.19M	914.69M	889.53M	932.46M
Net Income	564.15M	605.77M	595.32M	553.70M	553.67M	583.79M
Balance Sheet
Total Assets	3.25B	3.26B	3.22B	3.07B	3.27B	3.65B
Cash, Cash Equivalents and Short-Term Investments	772.95M	983.28M	1.08B	1.02B	1.05B	1.06B
Total Debt	1.92B	2.03B	1.96B	1.93B	1.92B	1.94B
Total Liabilities	3.44B	3.18B	3.13B	3.04B	3.06B	3.30B
Stockholders Equity	-192.84M	88.90M	90.59M	32.06M	211.63M	352.40M
Cash Flow
Free Cash Flow	648.29M	598.85M	657.18M	752.14M	746.58M	573.14M
Operating Cash Flow	729.92M	680.88M	720.86M	821.84M	808.54M	625.93M
Investing Cash Flow	-105.11M	-105.37M	-93.86M	-101.39M	-76.54M	-45.52M
Financing Cash Flow	-639.31M	-647.44M	-564.31M	-750.99M	-1.26B	-2.41B

H&R Block Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 50.90
• 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 50.9 is below the 20-day moving average (MA) of 52.23, below the 50-day MA of 54.15, and below the 200-day MA of 55.09, indicating a bearish trend. The MACD of -1.14 indicates Positive momentum. The RSI at 35.70 is Neutral, neither overbought nor oversold. The STOCH value of 37.85 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
SCI	75 Outperform	$11.16B	21.60	34.52%	1.57%	2.65%	7.42%
FTDR	75 Outperform	$4.43B	18.30	109.83%	―	8.56%	31.87%
BFAM	74 Outperform	$6.76B	39.31	13.19%	―	9.25%	74.86%
HRB	67 Neutral	$6.74B	11.81	673.21%	2.99%	4.17%	5.56%
CSV	64 Neutral	$703.76M	13.47	24.38%	1.03%	3.55%	73.06%
MCW	63 Neutral	$1.88B	21.88	8.62%	―	7.21%	20.31%
Sector *	61 Neutral	$17.78B	13.97	-5.49%	3.03%	1.50%	-15.71%

H&R Block Corporate Events

H&R Block’s Subsidiary Issues $350M Notes

On August 26, 2025, Block Financial LLC, a subsidiary of H&R Block, Inc., successfully issued and sold $350 million in principal amount of 5.375% Notes due in 2032. These notes are fully guaranteed by H&R Block, Inc. and were registered under the Securities Act of 1933. The issuance is part of a strategic financial maneuver to strengthen the company’s financial position, with provisions for redemption and repurchase under certain conditions, which may impact the company’s operations and stakeholder interests.

H&R Block Enters $350 Million Notes Agreement

On August 19, 2025, H&R Block, Inc. and Block Financial LLC entered into an Underwriting Agreement with several underwriters for the issuance and sale of $350 million in Notes due 2032. The sale, expected to close on August 26, 2025, is part of a registered offering under the Securities Act of 1933, indicating a strategic financial move that could impact the company’s market positioning and stakeholder interests.

H&R Block Announces Upcoming Leadership Change

On August 13, 2025, H&R Block announced that Kellie J. Logerwell will retire as Vice President and Chief Accounting Officer on October 24, 2025, with April M. Wasleski set to succeed her. Ms. Wasleski, who has been with the company for over 13 years, will assume the role with a background in accounting and finance, having previously worked at Ernst & Young LLP.

H&R Block Boosts Dividend Amid Revenue Growth

H&R Block reported a 4% revenue growth and a 7% increase in earnings per share for fiscal 2025, ending June 30, 2025, highlighting its transformation journey and focus on client engagement and technology. The company announced a 12% increase in its quarterly dividend to $0.42 per share, payable on October 6, 2025, and returned $600 million to shareholders through dividends and share repurchases, with a continued commitment to delivering long-term value.

H&R Block CEO Retirement Announced

On August 11, 2025, H&R Block announced that CEO Jeffrey J. Jones II will retire on December 31, 2025, after eight years of leadership. He will continue as a Strategic Advisor until September 2026. Curtis Campbell, currently the President of Global Consumer Tax and Chief Product Officer, will succeed Jones as CEO starting January 1, 2026. Under Jones’ leadership, H&R Block saw significant growth, including a 123% increase in stock price and a rise in market capitalization from $5.5 billion to $7.4 billion. His tenure was marked by innovation and shareholder value creation, with initiatives like Upfront Transparent Pricing and AI Tax Assist. The transition to Campbell, who has extensive experience in the tax industry, follows a comprehensive succession-planning process, and he is expected to continue driving the company’s transformation and growth.

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.