HRB · H&R Block
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $46.00
Note written ·
How this view changed
- · Rated Medium. Results, 9 November 2026: H&R Block beat fiscal Q1 revenue ($224.3M vs $212.3M est.) and the adjusted loss estimate ($1.40 vs $1.43), and reaffirmed fiscal 2027 adjusted EPS of $6.04–$6.24.
Price against the kill line
8.7% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $46.00, on record since 10 November 2026. The shares are up 0.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $46.00, under the 50-day average, which would undo the recovery in the shares. A cut to the $6.04–$6.24 fiscal 2027 adjusted EPS range or the $4.110–$4.160 billion revenue range would also break the case.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Consumer Discretionary
Quarter to 30 September 2026, filed 9 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 224
- Revenue, change on a year (%)
- +10.2
- Gross margin (%)
- −38.3
- Operating margin (%)
- −103.4
- Free cash flow, four quarters ($M)
- 747
- Net cash, cash less debt ($M)
- −1,102
- Enterprise value to sales (×)
- 1.8
- Enterprise value to operating income (×)
- 8.2
All filed numbers
What H&R Block reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 224 | +10.2 | −38.3 | −103.4 |
| first filed | 1,145 | +3.0 | — | 32.9 |
| first filed | 2,398 | +5.3 | 57.0 | 43.2 |
| first filed | 199 | +11.1 | −70.9 | −150.3 |
| first filed | 204 | +5.0 | −34.6 | −101.7 |
| first filed | 1,111 | +4.6 | — | 33.4 |
| Pre-tax income ($M) | −241 |
| Net income ($M) four quarters: −325 | −189 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −6.3 |
| Operating cash flow ($M) | 837 |
| Capital spending ($M) | 90.2 |
| Free cash flow ($M) | 747 |
| Cash and short-term investments ($M) | 391 |
| Debt ($M) long-term debt | 1,492 |
| Net cash, cash less debt ($M) | −1,102 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 63.6 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | −242 |
| Market value ($M) at the 13 November 2026 close, filed figures to 14 August 2026 | 6,165 |
| Enterprise value, market value plus net debt ($M) | 7,266 |
| Enterprise value to sales (×) | 1.8 |
| Enterprise value to operating income (×) | 8.2 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | Not meaningful |
| Free-cash-flow yield (%) | 12.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 15.1% of shares outstanding sold short, 10.2 days of average trading to cover, +0.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $110K |
| 12 monthsfrom | $0 | $5.8M |
The thesis
H&R Block is rated modestly more likely than not to beat the S&P 500 over the next three months. Management reaffirmed fiscal 2027 adjusted earnings per share (EPS) of $6.04–$6.24 on 9 November 2026 after a first quarter that beat estimates, and the 3 December 2026 Investor Day is the next scheduled update to that range. The January–April filing season, reported from the fiscal third quarter, settles whether the range holds.
The shares closed at $50.73 on 12 November 2026, 13.5% below the 52-week intraday high of $58.67 set on 12 August 2026. The close is above the 50-day average of $46.75 and the 200-day average of $39.22 (adjusted daily closes). The 3-month price change is −5.1%. The shares closed at $55.01 on 5 November 2026 and have drifted lower since, so the market is already paying for the reaffirmed range and is not extending it.
Fiscal first-quarter revenue was $224.3 million, up 10.2% from $203.5 million a year earlier (10-Q, 9 November 2026). The adjusted loss was $1.40 per share against a $1.43 loss expected (Benzinga, 9 November 2026). Goldman Sachs kept its Sell rating and raised its target to $40, according to a news headline dated 10 November 2026.
Bullish and bearish views on H&R Block, Inc.
The bull case on H&R Block, Inc. (HRB), in brief: guidance reaffirmed around consensus. The bear case: the seasonal loss widened.
Bull case
- Guidance reaffirmed around consensus. On 9 November 2026 management held fiscal 2027 adjusted EPS at $6.04–$6.24 and revenue at $4.110–$4.160 billion, against consensus of $6.14 and $4.134 billion (Benzinga, 9 November 2026). Chief Financial Officer Tiffany Mason said the company remains confident in the assumptions behind the outlook.
- The quarter beat. Revenue of $224.3 million compared with a $212.3 million estimate, and the adjusted loss of $1.40 per share compared with a $1.43 loss expected (Benzinga, 9 November 2026).
- Share count is shrinking. Weighted average diluted shares were 123.1 million against 131.4 million a year earlier (8-K, 9 November 2026). The company bought 2.2 million shares for $100.3 million in the quarter, an average of $45.68.
- Dividend and buyback capacity remain. The board declared a $0.46 quarterly dividend payable 6 January 2027 to holders of record on 3 December 2026, after a 10% raise announced 11 August 2026. About $500 million remains under the $1.5 billion repurchase authorization (8-K, 9 November 2026).
- Cash generation was strong in fiscal 2026. Operating cash flow was $838.7 million, up 23%, on revenue of $3.95 billion, up 4.9% (company release, 11 August 2026).
Bear case
- The seasonal loss widened. The adjusted loss was $1.40 per share against $1.20 a year earlier, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was a $185.2 million loss against $170.0 million (8-K, 9 November 2026). Operating expenses rose 11.1%, slightly faster than revenue.
- The tax rate absorbs growth. Guidance assumes an effective tax rate of about 23% for fiscal 2027, against 14% in fiscal 2026 (company outlook, 11 August 2026; reaffirmed 9 November 2026).
- Per-share growth leans on buybacks. Planned fiscal 2027 repurchases are about $400 million against $500.3 million in fiscal 2026 (company releases, 11 August 2026 and 9 November 2026). Fiscal 2026 revenue growth was 4.9%.
- The balance sheet is thin in the loss quarters. Cash was $390.5 million on 30 September 2026 against $958.7 million on 30 June 2026. Long-term debt was $1,492.1 million and the stockholders' deficiency was $242.3 million (8-K, 9 November 2026).
- The first quarter says little about the season. September is a seasonal loss quarter, and nearly all annual profit comes from the January–April filing season. Goldman Sachs's Sell rating remains in place, with a $40 target per a news headline dated 10 November 2026.
Price setup
The shares closed at $50.73 on 12 November 2026, after closes of $55.01 on 5 November 2026, $52.69 on 6 November 2026 and $50.98 on 9 November 2026. The 52-week high is $58.67 (intraday, 12 August 2026) and the 52-week closing low is $28.34 (12 February 2026).
The 50-day average of $46.75 and the 200-day average of $39.22 are both rising toward the price, which keeps the shares in an uptrend. The close of $53.92 on 14 August 2026 is the reference for the 3-month change of −5.1%, so the shares have not yet regained their August level.
The next dated events are the Investor Day and the dividend record date, both on 3 December 2026. Fiscal second-quarter results are expected in early February 2027. The company's first-quarter average repurchase price of $45.68 sits below the current close.
Catalysts ahead
- 3 December 2026: H&R Block Investor Day. Management can set medium-term targets and detail how it plans to grow beyond the fiscal 2027 range of $6.04–$6.24 adjusted EPS.
- 3 December 2026: Dividend record date for the $0.46 quarterly dividend, payable 6 January 2027. Marks the next payment in a dividend that has risen for nine consecutive years.
- ~5 February 2027 (est.): Fiscal 2027 second-quarter results. Shows whether the seasonal loss narrows and whether management holds the $6.04–$6.24 range before the filing season peaks.
What would change the view
A daily close below $46.00, under the 50-day average, which would undo the recovery in the shares. A cut to the $6.04–$6.24 fiscal 2027 adjusted EPS range or the $4.110–$4.160 billion revenue range would also break the case.
The risks this note tracks, each with what would confirm it:
- Per-share growth leans on share-count reduction while planned fiscal 2027 buybacks step down to about $400 million from $500.3 million. Confirmed by: diluted share count in the fiscal second-quarter 10-Q falling more slowly than the 123.1 million reported for the fiscal first quarter, or repurchase spend below plan.
- The effective tax rate rises to about 23% from 14%, absorbing pre-tax progress. Confirmed by: a higher tax-rate assumption or a trimmed $6.04–$6.24 EPS range at the Investor Day or the February report.
- Operating expenses are growing faster than revenue, widening the seasonal loss. Confirmed by: fiscal second-quarter adjusted loss per share wider than a year earlier with expenses again outpacing revenue.
- A free federal filing product returns through legislation, reviving the competitive overhang removed in November 2025. Confirmed by: committee action or a floor vote on the Get Your Money Back Act, or an IRS free-file announcement for the 2028 season.
- Core growth of 4.9% leaves little room for a soft filing season. Confirmed by: US assisted or do-it-yourself return volumes in the spring fiscal 2027 quarters below the previous season.
What it trades with
H&R Block trades on its own earnings calendar: the January–April US filing season produces most of the year's profit, and the fiscal first and second quarters are seasonal losses. Intuit, which owns TurboTax, is the nearest listed competitor in digital tax filing. Intuit's season updates and any change in federal free-filing policy are the outside events most likely to move both. The shares carry a dividend and a buyback, so they respond to interest-rate moves more like a cash-return stock than a growth stock.
The evidence, claim by claim (7)
- Fiscal first-quarter 2027 revenue was $224.3 million, up 10.2% from $203.5 million; adjusted diluted loss per share was $1.40 against $1.20 a year earlier. H&R Block 8-K and 10-Q, fiscal 2027 first-quarter results · as of
- Management reaffirmed fiscal 2027 adjusted EPS of $6.04–$6.24 and revenue of $4.110–$4.160 billion, against consensus of $6.14 and $4.134 billion. Benzinga; H&R Block 8-K · as of
- Weighted average diluted shares were 123.1 million against 131.4 million a year earlier; the company repurchased 2.2 million shares for $100.3 million. H&R Block 8-K, fiscal 2027 first-quarter release · as of
- Cash was $390.5 million, long-term debt $1,492.1 million and stockholders' deficiency $242.3 million at quarter end. H&R Block 8-K, fiscal 2027 first-quarter release · as of
- H&R Block will host an Investor Day on 3 December 2026. Company news release · as of
- Goldman Sachs maintained its Sell rating on H&R Block and raised its price target to $40. News headline, 10 November 2026 · as of
- Fiscal 2026 operating cash flow was $838.7 million, up 23%, on revenue of $3.95 billion, up 4.9%; repurchases were $500.3 million. H&R Block fiscal 2026 results release · as of
Sources