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H&R Block Q4 Preview: 6th Consecutive EPS Beat Inbound?

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It’s that time of the year again. Earnings season is in high gear, with many companies reporting quarterly results daily.

Investors are anxious to see how companies have fought back against skyrocketing inflation, supply chain disruptions, and increased labor costs. Needless to say, we’ve found ourselves in a highly unique economic situation.

One company slated to release its 2022 Q4 results on Tuesday, August 8th, after the market closes is the widely-recognized H&R Block (HRB - Free Report) .

H&R Block Inc. is a leading provider of tax preparation services. In addition, H&R Block is currently a Zacks Rank #3 (Hold) with an overall VGM Score of an A.

Let’s take a closer look at how the company stacks up heading into the print.

Share Performance & Valuation

H&R Block shares have been scorching hot year-to-date, increasing a staggering 73% in value and absolutely crushing the S&P 500’s performance.

Zacks Investment Research
Image Source: Zacks Investment Research

Over the last month, HRB shares have primarily traded in line with the general market, increasing nearly 9% in value.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, the tax preparer has solid valuation levels, bolstered by its Style Score of an A for Value. HRB’s forward earnings multiple resides on the lower side at 10.9X, representing a deep 42% premium relative to the S&P 500 and just above its five-year median of 9.7X.

Zacks Investment Research
Image Source: Zacks Investment Research

Quarterly Estimates

Analysts have been quiet over the last 60 days, with zero estimate revisions coming in. Still, the Zacks Consensus EPS Estimate of $1.26 reflects a 9% drop in earnings year-over-year.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s top-line projections display some softening as well – HRB is projected to have generated $988 million in revenue during the quarter, penciling in a 5.5% decrease from year-ago quarterly sales of $1.1 billion.

Quarterly Performance & Market Reactions

HRB has consistently exceeded the Zacks Consensus EPS Estimate, registering six bottom-line beats over its last seven quarters. Just in its latest quarter, the company recorded a solid double-digit 17% EPS beat.

Top-line results have also been remarkable – H&R block has chained together nine consecutive top-line beats. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, day-traders who prefer the long side will appreciate this – over the company’s previous three quarterly prints, shares have moved upwards following each one, all by at least 5%.

Putting Everything Together

H&R Block shares have soared year-to-date and have continued that strength over the last month. Valuation levels are solid, as displayed by its Style Score of an A for Value.

In addition, quarterly estimates allude to decreases within both the top and bottom-lines. However, the company has consistently reported quarterly results above estimates, and the market has reacted strongly as of late following each of its last three prints.

Heading into the release, H&R Block (HRB - Free Report) carries a Zacks Rank #3 (Hold).


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