H&R Block stock remains near its two-year high
H&R Block Inc (NYSE:HRB) is an American tax preparation company that operates in the United States, Canada, and Australia. HRB provides support to clients through tax preparation, financial services, and small business solutions. Through Block Advisors and Wave, H&R Block helps small business owners with products such as Wave Money, its small business banking and bookkeeping solutions platform.
H&R Block stock has increased approximately 74% in price year-over-year and it's staged an 89% bounce off its annual low of $13.51, hit on Sept. 21. Additionally, shares of HRB have grown by 62% year-to-date, and the stock is currently trading down a little less than 3% since hitting a two-year high of $26.23 in June, with a recent floor at the 20-day moving average. H&R Block also offers a forward dividend of $1.08.
The equity was last seen up 0.6% at $25.61, getting a slight boost from a price-target hike issued by Goldman Sachs to $18 from $16. Other members of the brokerage bunch could follow suit, especially considering HRB's 12-month consensus price target of $25.14 is a slight discount to current levels. Plus, of the five analysts in coverage, three consider the stock to be a "hold."
Furthermore, H&R Block has outperformed Wall Street's earnings expectations on three of its last four earnings reports. For Q1 of fiscal 2021, HRB beat analyst estimates by a margin of $0.05, reporting an EPS of $0.55. For Q2 of fiscal 2021, H&R Block missed estimates by a margin of $0.15, after its EPS dropped down to -$1.09. For Q3 of fiscal 2021, HRB beat estimates by a margin of $0.12, reporting an EPS with another drop down to -$1.17 per share. For Q4 of fiscal 2021, H&R Block beat expectations by a slight margin of $0.03 and reported a giant jump in EPS to $5.16 per share. Analysts anticipate HRB will go back into the red for Q1 of fiscal 2022, down to -$0.93 per share.
From a fundamental perspective, H&R Block stock does not appear to offer consistency or stability in its top- and bottom-line growth. However, with the exception of fiscal 2020, HRB has managed to maintain its annual revenues above $3 billion since fiscal 2018. In addition, H&R Block's fiscal 2021 revenues come in at $3.4 billion after growing 7% since 2018, giving H&R Block stock a price-sales ratio of 1.4.
H&R Block’s net income dropped by $620 million between fiscal 2018 and fiscal 2020, experiencing bottom-line declines for two consecutive years. Nonetheless, the tax company has since recovered nicely, increasing net income by about $576 million in fiscal 2021 and giving H&R Block stock a great trailing price-earnings ratio of 8.16.
Overall, considering HRB’s forward price-earnings ratio of 9.07 and high dividend yield of 4.24%, H&R Block stock provides enough reward potential for long-term dividend holders to justify the risks associated with the company