When you look at NYSE:HRB, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: May 23, 2024

H&R BLOCK INC (NYSE:HRB) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:HRB showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Valuation Examination for NYSE:HRB

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 7 out of 10:

A Price/Earnings ratio of 11.35 indicates a reasonable valuation of HRB.
Compared to the rest of the industry, the Price/Earnings ratio of HRB indicates a rather cheap valuation: HRB is cheaper than 85.94% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of HRB to the average of the S&P500 Index (28.49), we can say HRB is valued rather cheaply.
HRB is valuated reasonably with a Price/Forward Earnings ratio of 11.30.
Based on the Price/Forward Earnings ratio, HRB is valued cheaper than 84.38% of the companies in the same industry.
HRB is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.06, which is the current average of the S&P500 Index.
67.19% of the companies in the same industry are more expensive than HRB, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, HRB is valued cheaper than 85.94% of the companies in the same industry.
HRB has a very decent profitability rating, which may justify a higher PE ratio.

A Closer Look at Profitability for NYSE:HRB

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:HRB scores a 6 out of 10:

HRB's Return On Assets of 14.74% is amongst the best of the industry. HRB outperforms 92.19% of its industry peers.
Looking at the Return On Invested Capital, with a value of 26.01%, HRB belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HRB is significantly above the industry average of 14.74%.
The Profit Margin of HRB (12.58%) is better than 89.06% of its industry peers.
HRB's Operating Margin of 16.60% is amongst the best of the industry. HRB outperforms 81.25% of its industry peers.

Health Assessment of NYSE:HRB

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 6 for health provides valuable insights:

An Altman-Z score of 3.06 indicates that HRB is not in any danger for bankruptcy at the moment.
HRB has a Altman-Z score of 3.06. This is amongst the best in the industry. HRB outperforms 81.25% of its industry peers.
The Debt to FCF ratio of HRB is 2.20, which is a good value as it means it would take HRB, 2.20 years of fcf income to pay off all of its debts.
HRB has a Debt to FCF ratio of 2.20. This is amongst the best in the industry. HRB outperforms 81.25% of its industry peers.

How do we evaluate the Growth for NYSE:HRB?

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:HRB has achieved a 5 out of 10:

HRB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 42.81%, which is quite impressive.
The Earnings Per Share is expected to grow by 10.74% on average over the next years. This is quite good.
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.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of HRB for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.