It has been about a month since the last earnings report for H&R Block (HRB). Shares have lost about 10.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is H&R Block due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
H&R Block Reports Q2 Loss
H&R Block reported a second-quarter loss of $1.84 per share, which was 6.1% narrower than the consensus estimate but 6.4% wider year over year. Revenues of $198.9 million beat the consensus mark by 6.8% and increased 11.1% from the year-ago quarter.
HRB’s Quarterly Numbers
Revenues from U.S. tax preparation and related services were $111.8 million, up 13.8% year over year. Revenues from Financial services totaled $22.6 million, marking a marginal year-over-year rise. International revenues of $34.7 million rose 9.1%. Wave revenues registered a jump of 12.1% to $29.8 million.
Key Balance Sheet & Cash Flow Figures
H&R Block exited the quarter with cash and cash equivalents of $349.2 million. Long-term debt was $2.5 billion, compared with $1.7 billion at the end of the first quarter of fiscal 2026. The company used $614 million of cash in operating activities, while capital expenditures were $35.6 million.
HRB’s FY26 Outlook
Revenues are expected to be between $3.875 billion and $3.895 billion. HRB guided adjusted earnings in the range of $4.85-$5.00 per share for fiscal 2026.
The company guided EBITDA between $1.015 billion and $1.035 billion and an effective tax rate of 43% for fiscal 2026.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, H&R Block has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise H&R Block has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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H&R Block, Inc. (HRB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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