H&R Block Stock Down 40% as One Investor Builds a $35 Million Position

Core Viewpoint - Lodge Hill Capital has initiated a new position in H&R Block by acquiring 800,000 shares valued at $34.86 million, indicating confidence in the company's potential despite recent stock performance [1][2]. Company Overview - H&R Block is a leading provider of tax preparation services, operating through both physical retail locations and digital platforms, with a diversified suite of financial products tailored to individual and small business clients [6]. - The company reported a total revenue of $3.79 billion and a net income of $613.78 million for the trailing twelve months (TTM), with a dividend yield of 5.21% [4]. Recent Performance - In its fiscal second quarter, H&R Block reported revenue of $198.9 million, reflecting an 11% year-over-year increase, driven by stronger assisted tax preparation volumes and growth in its digital products [7]. - The company's shares were priced at $30.53 as of February 17, 2026, representing a 40% decline over the past year, significantly underperforming the S&P 500, which increased by about 20% [8]. Business Model and Strategy - H&R Block generates revenue primarily through service fees for tax preparation and financial products, leveraging a network of company-owned and franchised retail offices as well as digital channels [9]. - The business is highly seasonal, with management reaffirming its full-year outlook of expected revenue between $3.88 billion and $3.90 billion and EBITDA of approximately $1.02 billion to $1.04 billion [10]. Investment Implications - The key question for investors is whether H&R Block's mix of assisted services and digital tools can continue to attract tax filers who value expertise, especially as automation impacts the industry [11].