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Why Is H&R Block (HRB) Up 1.4% Since Last Earnings Report?

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A month has gone by since the last earnings report for H&R Block (HRB). Shares have added about 1.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is H&R Block due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

H&R Block Beats on Q4 Earnings and Revenues

H&R Block, Inc. reported better-than-expected fourth-quarter fiscal 2021 results.

Adjusted earnings per share of $5.16 came above the Zacks Consensus Estimate of $5.11 and increased 71.4% year over year. Revenues of $2.3 billion surpassed the consensus estimate by a slight margin and increased 28.7% year over year.

Quarterly Numbers in Detail

Service revenues of $2.1 billion increased 29% year over year. Royalty, product and other revenues came in at $217.6 million, up 25.2% year over year. Adjusted EBITDA came in at $1.1 billion, up 13.7% year over year. Adjusted EBITDA margin of 48.4% improved 310 basis point year over year.

H&R Block exited the quarter with cash and cash equivalents balance of $934.3 million compared with $280 million at the end of the prior quarter. Long-term debt and line-of-credit borrowings were $1.5 billion compared with $2.4 billion at the end of the previous quarter.

H&R Block generated $1.5 billion of cash in operating activities and capex was $4.7 million. The company paid out dividends of $47 million in the quarter.

2021 Outlook

H&R Block expects revenues in the range of $3.25 billion to $3.35 billion in 2022, below the current Zacks Consensus Estimate of $3.41 billion. EBITDA is expected to be between $765 million and $815 million.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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