Assessing H&R Block (HRB) Valuation After First Quarter Revenue Gains and Guidance Reaffirmation

H&R Block (HRB) released its first quarter earnings, reporting higher revenue and a narrower net loss compared to last year. The company also reaffirmed its full-year guidance, signaling continued confidence in its overall outlook.

See our latest analysis for H&R Block.

H&R Block’s recent earnings update and its decision to maintain a steady dividend have not managed to reverse the prevailing negative momentum, with the 1-year total shareholder return now sitting at -13.7% and the share price closing at $49.64. Still, its three- and five-year total shareholder returns of 33.7% and 237.2% suggest that the long-term story has rewarded patient investors. Recent performance, however, reflects shifting sentiment and higher caution around near-term growth.

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With shares trading at a discount to analyst price targets and solid long-term gains, is H&R Block currently undervalued, or is the market already factoring in all expected future growth?

Most Popular Narrative: 9.7% Undervalued

H&R Block’s most widely followed narrative suggests its fair value is $55, nearly 10% above where shares last closed at $49.64. This underscores a belief that recent price weakness may not reflect the company’s full growth and margin potential.

“The ongoing growth in tax code complexity, illustrated by recent legislative changes (e.g., One Big Beautiful Bill) and the shift of more consumers, including higher-income and small business clients, to professional assistance, positions H&R Block to benefit from increased client demand and higher-value client segments. This is likely to drive sustained revenue growth and improved earnings mix over time.”

Read the complete narrative.

What’s fueling this higher fair value? It’s not just optimism. The narrative is built on ambitious financial forecasts, bold market share moves, and a changing mix of premium clients. Wondering which trends really drive the math? Dive in to see what’s behind these projections.

Result: Fair Value of $55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent market share losses and greater competition from digital-first, lower-cost tax solutions could challenge H&R Block’s growth story in the years ahead.

Find out about the key risks to this H&R Block narrative.

Build Your Own H&R Block Narrative

If you want to dig into the numbers yourself or see things differently, you can easily craft a personalized narrative in just a few minutes with Do it your way.

A great starting point for your H&R Block research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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