H&R Block (HRB) Stock Forecast & Price Target

H&R Block Inc reported a notable increase in operating income, which rose 5.8% to $371.3 million, exceeding expectations and highlighting the company's financial strength. Additionally, the company's revenue for the fourth quarter reached $1.111 billion, marking a 4.6% increase from the previous year and surpassing both internal estimates and FactSet consensus figures. This performance underscores H&R Block's robust position in the income tax preparation sector, particularly in the U.S. market, which is crucial for its revenue generation.

H&R Block Inc. has adjusted earnings per share (EPS) expectations for FY/26 in the range of $4.85-5.00, which reflects an increase of only 4.1-7.3% year-over-year, yet is notably below the FactSet consensus of $5.15 due to an anticipated rise in the tax rate from 22% in FY/25 to approximately 25% in FY/26. This higher tax rate is projected to negatively impact adjusted EPS by roughly $0.19, contributing to concerns over the company's profitability in the upcoming fiscal year. Additionally, despite a decrease in stock value by 3% year-to-date and recent trading at a discount to its five-year average EV/EBITDA, the overall outlook remains cautious in light of these key financial metrics.