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H&R Block (HRB) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

H&R Block, Inc. HRB is scheduled to report second-quarter fiscal 2020 results on Dec 4, after the bell.

The company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 1.9%. Shares of H&R Block have gained 3.1% in the past three months, against the 0.4% decline of the industry it belongs to.

Q2 Expectations

The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $163.4 million, indicating year-over-year growth of 9.8%. Contribution from Wave Financial acquisition, improved tax return volumes in both U.S. Assisted and DIY, and increased international tax preparation fees are likely to have benefited the top line.

The consensus estimate for the bottom line is pegged at a loss of 91 cents, indicating an increase from a loss of 83 cents incurred in the year-ago quarter. Loss is likely to have widened as the company absorbs Wave Financial’s operating loss and technology-related expenses.

What Our Model Says

Our proven Zacks model does not conclusively predict an earnings beat for H&R Block this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

H&R Block has an Earnings ESP of -1.75% and a Zacks Rank #3.

Stocks to Consider

Some better-ranked stocks in the broader Zacks Business Services sector are Global Payments GPN, Mastercard MA and Cardtronics CATM. While Global Payments and Cardtronics sport a Zacks Rank #1, Mastercard carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected EPS (three to five years) growth rate for Global Payments, Mastercard and Cardtronics is 17%, 16% and 4%, respectively.

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