NYSE:HRB is probably undervalued for the fundamentals it is displaying.

Discover H&R BLOCK INC (NYSE:HRB)—an undervalued stock our stock screener has picked out. NYSE:HRB demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

Understanding NYSE:HRB's Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:HRB has achieved a 8 out of 10:

• HRB is valuated reasonably with a Price/Earnings ratio of 11.25.
• Compared to the rest of the industry, the Price/Earnings ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 84.85% of the companies listed in the same industry.
• HRB is valuated cheaply when we compare the Price/Earnings ratio to 25.90, which is the current average of the S&P500 Index.
• A Price/Forward Earnings ratio of 10.37 indicates a reasonable valuation of HRB.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 84.85% of the companies listed in the same industry.
• Compared to an average S&P500 Price/Forward Earnings ratio of 18.97, HRB is valued a bit cheaper.
• Based on the Enterprise Value to EBITDA ratio, HRB is valued a bit cheaper than the industry average as 68.18% of the companies are valued more expensively.
• 89.39% of the companies in the same industry are more expensive than HRB, based on the Price/Free Cash Flow ratio.
• The decent profitability rating of HRB may justify a higher PE ratio.
• A more expensive valuation may be justified as HRB's earnings are expected to grow with 12.54% in the coming years.

How do we evaluate the Profitability for NYSE:HRB?

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:HRB has achieved a 7:

• The Return On Assets of HRB (12.46%) is better than 90.91% of its industry peers.
• The Return On Equity of HRB (1193.95%) is better than 100.00% of its industry peers.
• HRB has a better Return On Invested Capital (20.75%) than 95.45% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for HRB is significantly above the industry average of 9.40%.
• The 3 year average ROIC (27.02%) for HRB is well above the current ROIC(20.75%). The reason for the recent decline needs to be investigated.
• HRB has a Profit Margin of 10.48%. This is amongst the best in the industry. HRB outperforms 87.88% of its industry peers.
• With an excellent Operating Margin value of 14.77%, HRB belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.

Understanding NYSE:HRB's Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:HRB, the assigned 7 for health provides valuable insights:

• An Altman-Z score of 3.11 indicates that HRB is not in any danger for bankruptcy at the moment.
• HRB has a better Altman-Z score (3.11) than 80.30% of its industry peers.
• The Debt to FCF ratio of HRB is 1.98, which is an excellent value as it means it would take HRB, only 1.98 years of fcf income to pay off all of its debts.
• HRB's Debt to FCF ratio of 1.98 is amongst the best of the industry. HRB outperforms 83.33% of its industry peers.
• Even though the debt/equity ratio score it not favorable for HRB, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

Exploring NYSE:HRB's Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:HRB boasts a 4 out of 10:

• Based on estimates for the next years, HRB will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.54% on average per year.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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Our latest full fundamental report of HRB contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.