Core Insights - H&R Block reported revenue of $193.81 million for the quarter ended September 2024, marking a year-over-year increase of 5.5% and a surprise of +2.66% over the Zacks Consensus Estimate of $188.78 million [1] - The company reported an EPS of -$1.17, which is a decline from -$1.05 a year ago, but exceeded the consensus EPS estimate of -$1.21 by +3.31% [1] Revenue Performance by Segment - U.S. assisted tax preparation revenue was $42.96 million, exceeding the average estimate of $39.93 million, with a year-over-year increase of +9.4% [3] - U.S. royalties generated $5.85 million, surpassing the average estimate of $5.54 million, reflecting a year-over-year increase of +2.7% [3] - U.S. DIY tax preparation revenue was $3.24 million, below the average estimate of $4.13 million, showing a year-over-year decline of -15.9% [3] - International revenue reached $64.86 million, exceeding the estimated $61.36 million, with a year-over-year increase of +7.1% [3] - Tax Identity Shield revenue was $3.91 million, below the average estimate of $4.46 million, representing a year-over-year decline of -14.7% [3] - Emerald Card revenue was $8.83 million, slightly below the average estimate of $8.92 million, with a year-over-year increase of +2.2% [3] - Peace of Mind Extended Service Plan revenue was $23.10 million, below the average estimate of $24.85 million, reflecting a year-over-year decline of -7% [3] - Other revenues totaled $13.81 million, exceeding the average estimate of $11.85 million, with a year-over-year increase of +25.8% [3] - Wave revenue was $26.40 million, slightly below the average estimate of $26.51 million, with a year-over-year increase of +10.3% [3] - Refund Transfers revenue was $0.86 million, below the average estimate of $1.16 million, showing a year-over-year decline of -24.7% [3] Stock Performance - H&R Block shares have returned +1.3% over the past month, compared to the Zacks S&P 500 composite's +3.2% change, with a current Zacks Rank of 3 (Hold) indicating potential performance in line with the broader market [4]

Group 1 - H&R Block reported a quarterly loss of $1.17 per share, which was better than the Zacks Consensus Estimate of a loss of $1.21, but worse than the loss of $1.05 per share a year ago, indicating an earnings surprise of 3.31% [1] - The company posted revenues of $193.81 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.66% and showing an increase from $183.8 million in the same quarter last year [2] - H&R Block shares have increased approximately 29.3% since the beginning of the year, outperforming the S&P 500's gain of 24.3% [3] Group 2 - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The estimate revisions trend for H&R Block is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the shares are expected to perform in line with the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$1.44 on revenues of $184.48 million, and for the current fiscal year, it is $5.25 on revenues of $3.72 billion [7] Group 3 - The outlook for the Consumer Services - Miscellaneous industry, where H&R Block operates, is currently in the bottom 25% of over 250 Zacks industries, which may negatively impact stock performance [8]

Revenue Performance - Total revenues increased by $10.0 million, or 5.4%, to $193.8 million for the three months ended September 30, 2024, compared to the prior year[36] - U.S. assisted tax preparation revenues rose by $3.7 million, or 9.4%, driven by higher company-owned tax return volumes and an increase in net average charge[38] - International tax preparation revenues increased by $4.3 million, or 7.1%, primarily due to higher tax return volumes in Australia and favorable foreign currency exchange rates[38] Operating Expenses - Total operating expenses rose by $32.0 million, or 8.2%, with field wages increasing by $5.7 million, or 9.1%, due to higher tax professional wages[38] - Marketing and advertising expenses surged by $4.5 million, or 81.9%, attributed to lower vendor refunds for expired customer incentives and increased online advertising[38] Net Loss and Earnings Per Share - Net loss from continuing operations was $171.4 million, compared to a loss of $162.9 million in the prior year, reflecting an increase of $8.5 million, or 5.2%[36] - Basic and diluted loss per share for continuing operations was $(1.23), compared to $(1.11) in the prior year, representing a decrease of 10.8%[36] - Adjusted diluted loss per share from continuing operations was $(1.17) for the three months ended September 30, 2024, compared to $(1.05) in the prior year[56] Cash Flow and Financing Activities - Cash used in operating activities totaled $328.6 million for the three months ended September 30, 2024, compared to $335.0 million in the prior year[45] - Cash used in financing activities increased to $284.5 million, up from $195.2 million in the prior year, primarily due to higher repurchases of common stock[45] Tax and Dividends - The effective tax rate for the three months ended September 30, 2024, was 26.2%, compared to 23.3% in the prior year[40] - Dividends paid totaled $44.7 million for the three months ended September 30, 2024, compared to $43.0 million for the same period in 2023, reflecting a year-over-year increase of 3.95%[46] Share Repurchase and Capital Expenditures - The company repurchased $209.6 million of its common stock at an average price of $63.51 per share during the three months ended September 30, 2024, compared to $132.0 million at an average price of $40.43 per share in the prior year period, indicating a significant increase in repurchase activity[46] - Capital expenditures increased to $18.7 million for the three months ended September 30, 2024, up from $12.9 million in the same period of 2023, representing a 45% increase[47] Acquisitions and Commitments - The company acquired franchisee and competitor businesses totaling $5.9 million during the three months ended September 30, 2024, compared to $6.9 million in the prior year period[47] - The company has a remaining commitment to purchase additional federal Investment tax credits (ITCs) estimated to be $74.0 million, with the final payment anticipated by June 30, 2025[48] Cash Position - As of September 30, 2024, the company held cash and cash equivalents of $415.9 million, including $183.5 million held by foreign subsidiaries[48]

Core Viewpoint - Relying solely on sales and earnings figures may not provide sufficient insights for long-term investment decisions; a deeper analysis of a company's financial health, particularly its Interest Coverage Ratio, is essential for sustainable growth [1][2]. Financial Analysis - A critical analysis of a company's financial background is necessary for informed investment decisions, with coverage ratios being a key component [2]. - The Interest Coverage Ratio is a vital indicator that assesses a company's ability to pay interest on its debt, ensuring it is not over-leveraged [4][5]. - The formula for the Interest Coverage Ratio is Earnings before Interest & Taxes (EBIT) divided by Interest Expense [3]. Importance of Interest Coverage Ratio - A higher Interest Coverage Ratio indicates a stronger financial position, while a ratio below 1.0 suggests potential default on interest obligations [6][7]. - Companies with a robust Interest Coverage Ratio can better withstand financial hardships, making it a crucial metric for investors [7]. Investment Strategy - An effective investment strategy includes selecting stocks with an Interest Coverage Ratio above the industry average, a favorable Zacks Rank, and a VGM Score of A or B [8][10]. - Additional criteria for stock selection include a minimum stock price of $5, strong historical EPS growth, projected EPS growth above the industry median, and substantial trading volume [9]. Company Performance Highlights - Stride, Inc. (LRN) has a Zacks Rank of 1, with projected sales growth of 12.4% and EPS growth of 42% for the current financial year, and has increased by 65.2% over the past year [11]. - Modine Manufacturing Company (MOD) holds a Zacks Rank of 2, with projected sales growth of 8.4% and EPS growth of 18.8%, and has surged by 222.2% in the past year [12]. - H&R Block, Inc. (HRB) also has a Zacks Rank of 2, with projected sales growth of 3% and EPS growth of 18.4%, and has rallied by 46.3% in the past year [13]. - Leidos Holdings, Inc. (LDOS) carries a VGM Score of B and a Zacks Rank of 2, with projected sales growth of 5.4% and EPS growth of 22.7%, and has surged by 83.8% in the past year [14].

Here are three stocks with buy rank and strong income characteristics for investors to consider today, October 25:Virtu Financial, Inc. (VIRT) : This financial services company has witnessed the Zacks Consensus Estimate for its current year earnings increasing 4.7% the last 60 days.This Zacks Rank #1 company has a dividend yield of 3%, compared with the industry average of 0.0%Kinross Gold Corporation (KGC) : This gold exploration and development company has witnessed the Zacks Consensus Estimate for its cu ...

Here are three stocks with buy rank and strong value characteristics for investors to consider today, October 25:Kinross Gold Corporation (KGC) : This gold exploration and development company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 8.6% over the last 60 days.Kinross Gold Corporation has a price-to-earnings ratio (P/E) of 17.12 compared with 23.47 for the S&P. The company possesses a Value Score of A.Virtu Financial, Inc. (VIRT) : This ...

For those looking to find strong Consumer Discretionary stocks, it is prudent to search for companies in the group that are outperforming their peers. Has H&R Block (HRB) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.H&R Block is a member of our Consumer Discretionary group, which includes 272 different companies and currently sits at #10 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups b ...

Group 1: H&R Block - H&R Block is a leading provider of tax preparation services with a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for H&R Block's current year earnings has increased by 2.8% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 11.78, compared to 15.10 for the industry, and possesses a Value Score of A [1] Group 2: Matson - Matson is an ocean transportation and logistics company that offers shipping services in Hawaii, Guam, and Micronesia, with expedited service from China to southern California [1] - Matson carries a Zacks Rank 1 and has seen the Zacks Consensus Estimate for its current year earnings increase by 9.3% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 11.90, compared to 20.70 for the industry, and possesses a Value Score of A [1] Group 3: Rush Enterprises - Rush Enterprises operates the largest network of Peterbilt heavy-duty truck dealerships in North America and John Deere construction equipment dealerships in Texas and Michigan [2] - The company has a Zacks Rank 1 and has witnessed the Zacks Consensus Estimate for its current year earnings increase by 4.9% over the last 60 days [2] - Rush Enterprises has a price-to-earnings ratio (P/E) of 15.15, compared to 17.60 for the industry, and possesses a Value Score of B [2]

Core Viewpoint - H&R Block (HRB) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The upgrade reflects an upward trend in earnings estimates, with the Zacks Consensus Estimate for H&R Block expected to be $5.22 per share for the fiscal year ending June 2025, representing an 18.4% increase from the previous year [5]. - Over the past three months, analysts have raised their earnings estimates for H&R Block by 9.7% [5]. Impact of Earnings Estimates on Stock Prices - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors often base their valuation models on earnings estimates, leading to buying or selling actions that affect stock prices [3]. Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - H&R Block's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for price appreciation in the near term [6].

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