Oppenheimer Remains a Hold on H&R Block (HRB)

Oppenheimer analyst Scott Schneeberger maintained a Hold rating on H&R Block (NYSE: HRB) today. The company’s shares closed yesterday at $26.11.

Schneeberger observed:

“Seasonally light F1Q19 adjusted EPS of -$0.72 compared to our estimate/consensus/ F1Q18 of -$0.76/-$0.77/-$0.62, respectively. HRB noted F1Q19 was consistent with internal expectations/maintained FY19 revenue growth (down 1.9-3.5% y/y)/adjusted EBITDA margin of 24-26% (down 380-580bps y/y). It incrementally indicated FY19 adjusted EPS should be comparable to FY17 (+$1.96; FY19 current consensus is $1.90). Moderately incremental in discussing its FY19 strategic plan (lower pricing/technology investments/operational efficiency objectives), HRB was most forthright regarding its multi-year technology investments. Additionally incremental, HRB indicated 30% adjusted EBITDA margin would be a ceiling, at least during the elevated 3+ year IT investment period.”

According to TipRanks.com, Schneeberger is a 5-star analyst with an average return of 12.2% and a 70.6% success rate. Schneeberger covers the Services sector, focusing on stocks such as Service Corp International, Landstar System Inc, and XPO Logistics.

H&R Block has an analyst consensus of Hold, with a price target consensus of $24.50.

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Based on H&R Block’s latest earnings release for the quarter ending July 31, the company reported a quarterly GAAP net loss of $153 million. In comparison, last year the company had a GAAP net loss of $131 million.

Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of HRB in relation to earlier this year.

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H&R Block, Inc. engages in the provision of tax preparation and other services. It offers assisted and do-it-yourself tax return preparation solutions through multiple channels and distribute the H&R block-branded financial products and services, including those of its financial partners, to the general public primarily in the United States, Canada, and Australia. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955 and is headquartered in Kansas City, MO.