H&R Block (HRB) delivered impressive fiscal year 2021 results (ended April 30, 2021), as revenue and earnings exceeded the original outlook. During fiscal Q4, the company repurchased 2.1 million shares. Additionally, the board has approved a 4% increase in the quarterly dividend.
Revenues for the full year jumped 29.3% to $3.4 billion, due to an increase in U.S. tax return volumes. That increase was supported by the extension of the 2020 tax season into H&R Block’s fiscal 2021, along with growth in several of the company’s products. Revenue inQ4 totaled $2.3 billion, slightly below consensus estimates of $2.4 billion.
For the full year, adjusted EPS more than tripled to $3.4 from $0.84 in the year-ago period. (See H&R Block stock chart on TipRanks).
According to CEO Jeff Jones, the strong financial results underscore growth across the business.
Jones stated, “We made tremendous progress in our first year of Block Horizons, blending technology and digital tools with human expertise in tax, improving our offerings in small business, driving significant growth in Wave, and making progress on our new mobile banking platform.”
During Q4, the company repurchased shares totaling $38 million, having repurchased 11.6 million shares for the full year, valued at $188 million. It remains with approximately $564 million under the current repurchase program that expires in June of 2022.
Following the strong Q4 and full-year results, Barrington Research analyst Alexander Paris has reiterated a Buy rating on the stock with a $28 price target implying 18.5% upside potential to current levels.
“At current levels, the stock (which is up nearly 60% YTD) is trading at 8.7x our fiscal (June) 2022 non- GAAP diluted EPS estimate and 6.2x our fiscal (June) 2022 EBITDA estimate, compared to its five-year average P/E (NTM) and EV/EBITDA (LTM) of 10.8x and 7.3x, respectively,” said Paris.
Consensus among analysts is a Moderate Buy based on 2 Buys and 3 Holds. The average analyst H & R Block price target of $27.50 implies 16.43% upside potential to current levels.
HRB scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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