Stock daily read

What happened with HRB today?

Why it moved
Explains possible causes using the day’s news and filings
Moving with the market?
Uses market moves and trading volume to assess what drove the change
What to watch next
The next thing that could change the call, and what to look for

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Uses news and trading volume to explain the day’s move and how it relates to the market.

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Investment outlook

HRB in three months: buy, wait or sell?

Stop guessing. Get the call, a three-month target price, the best and worst cases, and a source for every claim.

In the report
  • Buy / Wait / Sell rating
  • 3-month target price
  • Bear · Base · Bull
  • vs. the market

Company

Company overview

H&R Block helps people prepare and file tax returns in the United States, Canada and Australia. Customers pay for a tax professional to handle their returns in an office or remotely, or use paid software to prepare returns themselves. Most revenue comes from U.S. tax preparation and related services, with professionally assisted preparation the largest source. U.S. franchise offices also pay H&R Block royalties based on their preparation and related-service revenue. The business is highly seasonal: it earns most revenue from February through April.

For U.S. customers who want to pay preparation fees out of their tax refund, H&R Block offers Refund Transfers through its bank partner, Pathward. Customers authorize fees to be deducted from the refund before receiving the remaining money. Pathward also issues the Emerald Card and Spruce accounts that H&R Block distributes, so these offerings depend on that bank relationship.

H&R Block also serves small businesses through Block Advisors, which provides tax, bookkeeping and payroll help, and Wave, which offers online financial tools including payment processing. Its ability to market additional products using customers’ tax-return information is constrained by IRS rules that generally require written taxpayer consent for uses beyond preparing returns.

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Source: SEC filing

Red flags

Know what’s buried in HRB’s filings before you buy

The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.

Sorted into
  • Happening now
  • Could go wrong
  • Built in

Moat

HRB says it has a moat. Does it hold up?

Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.

Each edge rated
  • Strong
  • Moderate
  • Limited
  • Unproven

Related companies

  • Competition
  • Shared drivers
  • Supplier
  • Customer

H&R Block’s results depend mainly on annual U.S. tax-filing demand, what it charges for assisted preparation, how many returns it handles, and competition from do-it-yourself and government alternatives.

  • CASHPathward Financial, Inc.

    H&R Block depends on Pathward Financial’s bank to provide accounts that let tax clients pay preparation fees from their refunds, issue debit cards and originate tax-related loans; disruption at this specialized partner could interrupt those services during tax season. Watch Pathward’s H&R Block program renewals and service interruptions, especially for Emerald and Spruce cards and refund advances.

Agenda

in 2 daysWed, Oct 21

  1. Time to be announced

    Pathward Financial, Inc. earningsCASH

    Pathward’s report will show how its financial-services business is faring; H&R Block relies on the bank for refund-paid fees, cards and tax-related loans.

in 17 daysThu, Nov 5

  1. Time to be announced
    Major

    H&R Block, Inc. earningsThis company

    H&R Block earns most of its revenue during tax season, and this report will show how it manages costs and cash use in the off-season.