H&R Block, Inc. HRB is a consumer services company that has performed exceptionally well in the past year and has the potential to sustain this momentum in the near term. Consequently, if you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes HRB International an Attractive Pick?
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run in the past year. Shares of H&R Block have gained 73.4% against a 21.6% decline in the industry it belongs to.
H&R Block, Inc. Price
H&R Block, Inc. price | H&R Block, Inc. Quote
Solid Rank: H&R Block has a Zacks Rank #2 (Buy) and a Value Growth Momentum Score (VGM Score) of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Four estimates for fiscal 2023 have moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2023 earnings has moved up 8.3%.
Positive Earnings Surprise History: HRB has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 19.2%.
Strong Growth Prospects: The company has an expected long-term earnings per share (three to five years) growth rate of 12.5%. Its earnings for fiscal 2023 and 2024 are expected to improve 7.7% and 9.7%, respectively, year over year.
Growth Factors: H&R Block has a five-year strategy, called Block Horizons, in place. The strategy is focused on using human expertise and technological infrastructure to drive innovation. It aims to build strong relationships with small businesses through Wave and Block Advisors, develop Emerald Card as a consumer-centric, mobile-first solution for the underbanked, and make taxation faster and more personalized by integrating human expertise with digital tools. Block Horizons is expected to help the company to earn sustainable revenues and operating profit growth, improve return on investments, and maintain a strong balance sheet and liquidity position.
We believe the main drivers of the company’s post-pandemic performance will be the digital enablement of its business, client addition and retention in both Assisted and DIY, greater usage of AI, machine learning for product improvement, and expansion in small businesses.
Other Stocks to Consider
Some other stocks in the broader Zacks Business Services sector that investors can consider are Avis Budget Group, Inc. CAR, Genpact Limited G and CRA International, Inc. CRAI.
Avis Budget sports a Zacks Rank #1 at present. CAR has an earnings growth rate of 108.4% for 2022.
Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.
Genpact carries a Zacks Rank #2 at present. G has a long-term earnings growth expectation of 12.1%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
CRA International flaunts a Zacks Rank of 1, currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.
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Charles River Associates (CRAI) : Free Stock Analysis Report
Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
H&R Block, Inc. (HRB) : Free Stock Analysis Report
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