H&R Block, Inc. (HRB): A Bull Case Theory

 We came across a bullish thesis on H&R Block, Inc. on X.com by FishtownCap. In this article, we will summarize the bulls’ thesis on HRB. H&R Block, Inc.'s share was trading at $50.19 as of September 16th. HRB’s trailing and forward P/E were 11.36 and 10.06, respectively according to Yahoo Finance.

H&R Block (HRB) presents a compelling opportunity for investors, particularly amid its ongoing short interest of 9%, which sets the stage for a potential squeeze similar to the post-Q4 earnings reaction. The company’s Q4 performance is expected to be significantly stronger than last year, largely driven by a favorable tax benefit, supporting an EPS increase of roughly $0.50 and freeing up ~$90 million for share repurchases.

HRB has a track record of returning 100% of free cash flow to shareholders through dividends and buybacks, having deployed $430 million last year and potentially increasing to $600 million this year, enough to retire approximately 8% of outstanding shares at a $56 average price. CEO Jeff Jones has signaled that Q4 results will be robust, and the combination of a pre-tax earnings increase of 5.7% in Q3, a 5% reduction in shares outstanding, and an attractive free cash flow yield at 10x FCF underscores the company’s value.

Share repurchases are concentrated outside of the tax season—primarily in August, September, and November—creating a near-term catalyst for shareholder returns. Operationally, HRB is expected to grow operating income by ~5% through modest pricing and volume improvements, and combined with the potential 7-8% reduction in shares, total returns could reach 12-13% plus a 3% dividend, translating to a mid-teens CAGR. With a conservative valuation, strong cash return policy, and structural upside from potential short squeezes, HRB offers investors a low-risk, high-return profile with multiple near-term catalysts while remaining a steady, cash-generative compounder.

Previously we covered a bullish thesis on Intuit Inc. (INTU) by Quality Equities in May 2025, which highlighted the company’s durable competitive advantages, recurring revenue model, and strategic ecosystem across TurboTax, QuickBooks, Credit Karma, and Mailchimp. The company's stock price has depreciated approximately by 1.65% since our coverage. The thesis still stands as Intuit continues to expand its SaaS platforms. FishtownCap shares a similar bullish perspective but emphasizes H&R Block’s (HRB) near-term upside from share repurchases, strong free cash flow returns, and potential short-squeeze catalysts.

H&R Block, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held HRB at the end of the second quarter which was 33 in the previous quarter. While we acknowledge the potential of HRB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.