November 21, 2024
Top 10 Stock H&R Block Strong Buy Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View H&R Block Strong Buy

360 METRICS	November 21, 2024
VALUE
VALUE	95
GROWTH
GROWTH	73
SAFETY
SAFETY	77
SENTIMENT
SENTIMENT	86
360° VIEW
360° VIEW	98

ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock H&R Block are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for H&R Block. The consolidated Value Rank has an attractive rank of 95, which means that the share price of H&R Block is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 95% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 73, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 77. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 86. ...read more

RECOMMENDATION: With a consolidated 360° View of 98, H&R Block is better positioned than 98% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 95), above-average growth (Growth Rank of 73), safe financing practices (Safety Rank of 77), and a positive market sentiment in the professional investor community (Sentiment Rank of 86), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of H&R Block is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more

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Sentiment Strategy: Professional Market Sentiment for H&R Block very positive

SENTIMENT METRICS	November 21, 2024
ANALYST OPINION
ANALYST OPINION	48
OPINIONS CHANGE
OPINIONS CHANGE	79
PRO HOLDINGS
PRO HOLDINGS	90
MARKET PULSE
MARKET PULSE	58
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	86

ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock H&R Block is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for H&R Block. Analyst Opinions are at a rank of 48 (worse than 52% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 79, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in H&R Block. Even better, the Professional Investors rank is 90, meaning that professional investors hold more stock in this company than in 90% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 58, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 58% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), H&R Block has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more

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Value Strategy: H&R Block Stock Price Value at the top

VALUE METRICS	November 21, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	25
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	86
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	96
DIVIDEND YIELD
DIVIDEND YIELD	86
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	95

ANALYSIS: With an Obermatt Value Rank of 95 (better than 95% compared with alternatives) for 2024, H&R Block shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for H&R Block. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 86 which means that the stock price compared with what market professionals expect for future profits is lower than for 86% of comparable companies, indicating a good value concerning H&R Block's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 96, and for Dividend Yield with a Dividend Yield Rank of 86. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 75% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 25). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 95, is a buy recommendation based on H&R Block's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that H&R Block has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing H&R Block shares. ...read more

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Growth Strategy: H&R Block Growth Momentum good

GROWTH METRICS	November 21, 2024
REVENUE GROWTH
REVENUE GROWTH	32
PROFIT GROWTH
PROFIT GROWTH	61
CAPITAL GROWTH
CAPITAL GROWTH	78
STOCK RETURNS
STOCK RETURNS	73
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	73

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), H&R Block shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for H&R Block. Profit Growth has a rank of 61 which means that currently professionals expect the company to grow its profits more than 61% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 78, and Stock Returns has a rank of 73 which means that the stock returns have recently been above 73% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 32 (68% of its competitors are better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more

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Safety Strategy: H&R Block Debt Financing Safety very solid

SAFETY METRICS	November 21, 2024
LEVERAGE
LEVERAGE	28
REFINANCING
REFINANCING	55
LIQUIDITY
LIQUIDITY	96
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	77

ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2024, the company H&R Block has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of H&R Block is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for H&R Block. Refinancing is at 55, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Liquidity is also good at 96, meaning the company generates more profit to service its debt than 96% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 28, which means the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), H&R Block has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and H&R Block could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more

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Combined financial peformance: H&R Block Top Financial Performance

COMBINED PERFORMANCE	November 21, 2024
VALUE
VALUE	95
GROWTH
GROWTH	73
SAFETY
SAFETY	96
COMBINED
COMBINED	98

ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), H&R Block (Specialized Consumer Services, USA) shares have much better financial characteristics than comparable stocks. Shares of H&R Block are a good value (attractively priced) with a consolidated Value Rank of 95 (better than 95% of alternatives), show above-average growth (Growth Rank of 73), and are safely financed (Safety Rank of 77), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on H&R Block's financial characteristics. As the company H&R Block's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 95), above-average growth (Obermatt Growth Rank of 73), and indicate that the company is safely financed (Obermatt Safety Rank of 77), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of H&R Block. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more

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