Tax season is now in full swing, and if you’re a savvy investor, you should be eyeing H&R Block’s stock. With a Zacks Rank #1 (Strong Buy) status, the company is currently the Bull of the Day, presenting a promising opportunity for potential shareholders in 2024.
If you’re still skeptical, let’s delve into why H&R Block, the leader in tax preparation services, is primed to be a lucrative investment for the forthcoming years.
AI Boost & Tax Season Growth
H&R Block is now entering its pivotal fiscal third quarter, the period leading up to the April 15th tax filing deadline. The company’s Q2 report showcased a narrower adjusted earnings loss and a commendable 7% growth in sales, setting the stage for a robust current quarter.
The anticipation is high as H&R Block is projected to witness a 12% increase in Q3 earnings, amounting to $4.71 per share, and a 2% rise in sales to $2.15 billion. Notably, the company has strategically leveraged artificial intelligence to introduce AI Tax Assist at the start of the year, streamlining the tax preparation process. As a result, H&R Block is positioned for a 10% rise in annual earnings for fiscal 2024 and an additional 11% increase in FY25, with projected total sales climbing 2% this year and a further 2% in FY25 to reach $3.64 billion.
Image Source: Zacks Investment Research
Recent Performance & Attractive Valuation
Over the last year, H&R Block’s price performance has outpaced the S&P 500, witnessing a significant +20% rise — quite a feat compared to the Zacks Consumer Services-Miscellaneous Market’s mere +2% increase. Impressively, HRB shares have soared +139% in the last three years, notably outperforming the benchmark and its Zack Subindustry.
Furthermore, HRB shares trade at 10.8X forward earnings, representing a substantial discount to the S&P 500’s 21X and residing below its Zacks Consumer Services-Miscellaneous industry average of 12X, where notable names in the space such as Cimpress, BJ’s Wholesale Club, and BrightView operate.
Zacks Top 10 Stocks for 2024.
If you’d like to get the latest recommendations from Zacks Investment Research, you can download 7 Best Stocks for the Next 30 Days.
You can read the full article on Zacks.com by clicking here.
Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
