H&R Block Inc (HRB) stock analysis

P/E below its 5-year median

H&R Block's P/E of 9.3 is below its own 5-year median of 11.8.

P/E below the industry

H&R Block's P/E of 9.3 is below the Consumer discretionary median of 19.6.

EV/EBITDA below its 5-year median

H&R Block's EV/EBITDA of 7.4 is below its 5-year median of 7.8.

P/S above the industry

H&R Block's price-to-sales of 1.58 is above the Consumer discretionary median of 0.76 (book value is negative, so we use sales).

Trading below fair value

The share price of $50.98 is below our fair value estimate of $76.18.

Margin of safety over 20%

The price is 33.1% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 4.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 17.3% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 5.2% over the last twelve months; the Consumer discretionary median is 2.1%.

Guidance raised

H&R Block raised its Fiscal Year 2026 Revenue outlook on May 6, 2026.

Gross margin slipping

Gross margin was 43.7% over the last twelve months, against 44.6% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -8.2% over the last twelve months, against a 5-year average of 16.8%.

Net margin below the industry

H&R Block's net margin of -8.2% is below the Consumer discretionary median of 2.2%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 56.1% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets don't cover short-term debts

Current assets are 0.72 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.50; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

H&R Block paid dividends worth 3.4% of the share price over the last twelve months.

Yield below Treasuries

The 3.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; H&R Block yields 3.4%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 28.6% of free cash flow.