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H&R Block (HRB) Down 6.8% Since Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for H&R Block, Inc. (HRB - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

H&R Block Beats Q1 Earnings and Revenue Estimates

H&R Block reported first-quarter fiscal 2018 (ended Jul 31, 2017) adjusted loss from continuing operations of 62 cents per share, narrower than the Zacks Consensus Estimate of loss of 63 cents. Better-than-expected results were attributable to a rise in revenues during the quarter.

GAAP loss from continuing operations came in at 63 cents per share compared with 56 cents in the year-ago quarter.           

Operational Performance

H&R Block reported revenues of $137.8 million in the fiscal first quarter compared with $125.2 million in the prior-year quarter. Revenues beat the Zacks Consensus Estimate of $130 million.

Total operating expenses increased 4.2% year over year to $323 million, due to higher occupancy, amortization, and compensation costs.

Financial Position

H&R Block exited the quarter with cash and cash equivalents of $551.6 million compared with $306.9 million as of Jul 31, 2016. Total outstanding long-term debt was approximately $1,493 million.

For the fiscal first quarter, net cash used for operating activities was $409.1 million, compared with $458 in the year-ago quarter.

Dividend

The board of directors declared a quarterly dividend of 24 cents per share, payable on Oct 2 to shareholders on record as of Sep 13. The company has been paying quarterly dividends to its shareholders since the company went public in 1962.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the past month as none of them issued any earnings estimate revisions.

H&R Block, Inc. Price and Consensus

 

H&R Block, Inc. Price and Consensus | H&R Block, Inc. Quote

VGM Scores

At this time, H&R Block's stock has a subpar Growth Score of D, though it is doing a lot better on the momentum front with a B.  The stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is more suitable for value than momentum based on our styles scores.

Outlook

The stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.


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