QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)

Why H&R Block Stock Looks More Attractive After Earnings Dip

H&R Block stock price

Key Points

  • H&R Block stock is down despite posting better-than-expected earnings results and increasing its guidance. 
  • The pullback reflects a similar move in August 2022 that took the stock below $40 a share.  
  • The company is evolving and committed to shareholder value, making the stock an attractive buy on the dip.  
  • 5 stocks we like better than H&R Block

Shares of H&R Block Inc. NYSE: HRB stock are down 9% the morning after it released its second quarter 2024 earnings. The company posted negative earnings per share of $1.27 on revenue of $179.10 million.  

Analysts and investors were expecting negative earnings. Tax preparation is a cyclical business, and the second quarter has historically been the company's weakest quarter. However, the loss was better than expected, and the revenue was slightly higher than analysts' forecasts. In addition to that, both numbers were higher than in the same quarter in 2023.  

But after climbing 19% in the last 12 months, HRB stock was more than priced for perfection. The stock was trading at a valuation higher than its historical average and looking slightly overvalued among finance stocks. And while its results were not poor, they gave investors enough cover to sell the stock. The good news is that the dip in HRB stock will look more attractive as the company enters its two strongest quarters.  

One reason to believe HRB stock is setting up as a buyable dip is that the company has reaffirmed its full-year guidance. That puts revenue at a level between $3.53 and $3.58 billion. It also is forecasting EPS between $4.10 and $4.30.  

The company is evolving  

HRB stock is up 19% in the last 12 months. There were a couple of catalysts for this growth. First, the company launched a mobile banking service to help offset the cyclical nature of tax preparation. Second, the company is seeing strong growth in its small business accounting service.  

Heading into this tax season, H&R Block is touting the launch of artificial intelligence (AI) tools to help customers with tax preparation. With these tools, customers can do their taxes with assistance, without assistance, or in some hybrid fashion.  

HRB stock is a deep value pick for investors 

H&R Block is a good pick for deep value investors. It's a shareholder-friendly company that has returned $3.8 billion to shareholders since 2016.  


In the last quarter, the company bought back 4.8 million shares for $218.1 million. The company also has authorization to buy back an additional $1.25 billion in shares through 2025.  

H&R Block also pays a dividend that currently has a 2.96% yield. The dividend has a safe payout ratio of about 34%. With revenue and earnings expected to continue to grow, the 3-year growth in the dividend will likely continue, probably in the company's fiscal fourth quarter.  

You can buy HRB stock on the dip  

H&R Block reached $47 per share once before in August 2022. After that, the stock fell below $30 in May 2023. But since then, the stock has rallied nicely.  

After the company's earnings report, The Goldman Sachs Group Inc. NYSE: GS quickly reiterated its Sell rating on HRB stock. However, in doing so, the firm raised its price target from $34 to $38.  

When the stock was trading at $47 a share heading into earnings, that would have seemed like a tough buy. But with the post-earnings dip, the stock is trading slightly below the consensus target of the H&R Block analyst ratings on MarketBeat.  

The post-earnings dip has pushed HRB stock below its 50-day simple moving average. It also broke below a support level at around $45.50. From here, investors should look at a support level at about $41.  

→ Tech insider: "Watch your mailbox" (From Stansberry Research) (Ad)

Should you invest $1,000 in H&R Block right now?

Before you consider H&R Block, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and H&R Block wasn't on the list.

While H&R Block currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

10 "Recession Proof" Stocks That Will Thrive in Any Market Cover

Which stocks are likely to thrive in today's challenging market? Click the link below and we'll send you MarketBeat's list of ten stocks that will drive in any economic environment.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
H&R Block (HRB)
4.1292 of 5 stars
$45.73-1.6%2.80%12.60Hold$43.00
The Goldman Sachs Group (GS)
4.8235 of 5 stars
$385.04-0.4%2.86%16.87Moderate Buy$409.93
Compare These Stocks  Add These Stocks to My Watchlist 

Chris Markoch

About Chris Markoch

  • CTMarkoch@msn.com

Editor & Contributing Author

Retirement, Individual Investing

Experience

Chris Markoch has been an editor & contributing writer for MarketBeat since 2018.

Areas of Expertise

Value investing, retirement stocks, dividend stocks

Education

Bachelor of Arts, The University of Akron

Past Experience

InvestorPlace


Featured Articles and Offers

Search Headlines:

My Account -