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Is H&R Block (HRB) Stock Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

H&R Block (HRB) is a stock many investors are watching right now. HRB is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.81. This compares to its industry's average Forward P/E of 11.91. Over the last 12 months, HRB's Forward P/E has been as high as 12.80 and as low as 7.25, with a median of 8.71.

HRB is also sporting a PEG ratio of 0.95. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HRB's industry has an average PEG of 1.02 right now. Within the past year, HRB's PEG has been as high as 1.02 and as low as 0.58, with a median of 0.70.

Finally, our model also underscores that HRB has a P/CF ratio of 10.74. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.19. HRB's P/CF has been as high as 627.39 and as low as -147.91, with a median of 8.13, all within the past year.

Another great Consumer Services - Miscellaneous stock you could consider is Pactiv Evergreen (PTVE), which is a # 1 (Strong Buy) stock with a Value Score of A.

Pactiv Evergreen sports a P/B ratio of 1.37 as well; this compares to its industry's price-to-book ratio of 5.94. In the past 52 weeks, PTVE's P/B has been as high as 2.27, as low as 1.22, with a median of 1.51.

These figures are just a handful of the metrics value investors tend to look at, but they help show that H&R Block and Pactiv Evergreen are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HRB and PTVE feels like a great value stock at the moment.


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