H&R Block, Inc.
H&R Block, Inc. Fundamental Analysis
H&R Block, Inc. (HRB) shows moderate financial fundamentals with a PE ratio of 6.42, profit margin of 16.19%, and ROE of -1.66%. The company generates $3.8B in annual revenue with moderate year-over-year growth of 4.17%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -77.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HRB's fundamental strength across five key dimensions:
Efficiency Score
ExcellentHRB demonstrates superior asset utilization.
Valuation Score
ExcellentHRB trades at attractive valuation levels.
Growth Score
WeakHRB faces weak or negative growth trends.
Financial Health Score
ExcellentHRB maintains a strong and stable balance sheet.
Profitability Score
ModerateHRB maintains healthy but balanced margins.
Key Financial Metrics
Is HRB Expensive or Cheap?
P/E Ratio
HRB trades at 6.42 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HRB's PEG of 0.34 indicates potential undervaluation.
Price to Book
The market values H&R Block, Inc. at -4.79 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 1.09 times EBITDA. This is generally considered low.
How Well Does HRB Make Money?
Net Profit Margin
For every $100 in sales, H&R Block, Inc. keeps $16.19 as profit after all expenses.
Operating Margin
Core operations generate 25.20 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-1.66 in profit for every $100 of shareholder equity.
ROA
H&R Block, Inc. generates $20.95 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
H&R Block, Inc. produces operating cash flow of $606.66M, showing steady but balanced cash generation.
Free Cash Flow
H&R Block, Inc. generates strong free cash flow of $524.88M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.14 in free cash annually.
FCF Yield
HRB converts 13.37% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
6.42
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.34
vs 25 benchmark
P/B Ratio
Price to book value ratio
-4.79
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.04
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-3.93
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.29
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-1.66
vs 25 benchmark
ROA
Return on assets percentage
0.21
vs 25 benchmark
ROCE
Return on capital employed
0.42
vs 25 benchmark
How HRB Stacks Against Its Sector Peers
| Metric | HRB Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 6.42 | 24.38 | Better (Cheaper) |
| ROE | -166.12% | 1158.00% | Weak |
| Net Margin | 16.19% | 858.00% | Weak |
| Debt/Equity | -3.93 | 0.78 | Strong (Low Leverage) |
| Current Ratio | 1.29 | 2.59 | Neutral |
| ROA | 20.95% | -7980.00% (disorted) | Strong |
HRB outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews H&R Block, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
51.47%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
52.61%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
51.73%
Industry Style: Cyclical, Growth, Discretionary
High Growth