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H&R Block (HRB) Gains But Lags Market: What You Should Know

·3 min read

H&R Block (HRB) closed the most recent trading day at $44.94, moving +1.19% from the previous trading session. This move lagged the S&P 500's daily gain of 1.83%. Elsewhere, the Dow gained 1.4%, while the tech-heavy Nasdaq added 0.09%.

Coming into today, shares of the tax preparer had gained 12.6% in the past month. In that same time, the Consumer Discretionary sector lost 6.87%, while the S&P 500 lost 5.51%.

Investors will be hoping for strength from H&R Block as it approaches its next earnings release. In that report, analysts expect H&R Block to post earnings of -$0.89 per share. This would mark a year-over-year decline of 14.1%. Our most recent consensus estimate is calling for quarterly revenue of $204.98 million, up 6.41% from the year-ago period.

HRB's full-year Zacks Consensus Estimates are calling for earnings of $3.78 per share and revenue of $3.55 billion. These results would represent year-over-year changes of +7.69% and +2.56%, respectively.

Investors might also notice recent changes to analyst estimates for H&R Block. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.56% higher. H&R Block is currently a Zacks Rank #2 (Buy).

Digging into valuation, H&R Block currently has a Forward P/E ratio of 11.75. Its industry sports an average Forward P/E of 11.43, so we one might conclude that H&R Block is trading at a premium comparatively.

Also, we should mention that HRB has a PEG ratio of 0.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Consumer Services - Miscellaneous industry currently had an average PEG ratio of 2 as of yesterday's close.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 92, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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