H&R Block is a discounted, high-cash-flow tax franchise using pricing, complex-filer migration, Wave expansion, and aggressive buybacks to support attractive long-term upside despite Direct File risk.
Overview
H&R Block is a global financial-services company built around assisted and DIY tax preparation, financial products, and SMB software. Its hybrid expert-led, technology-enabled model competes with Intuit’s digital platforms and independent CPAs through brand trust, upfront pricing, accuracy guarantees, omnichannel filing, and a large retail footprint. The company is deliberately moving toward higher-lifetime-value households earning $50,000-$200,000, which now comprise 50% of clients versus 38% previously, while Wave and Block Advisors extend the addressable market into the $100 billion-plus SMB software and services category. **FY2026 demonstrated strong execution:** revenue rose 4.9% to $3.95 billion, adjusted EPS increased 13.9% to $5.31, operating cash flow grew 23% to $838.7 million, and free cash flow reached $756 million. FY2027 guidance calls for $4.11-$4.16 billion of revenue and $6.04-$6.24 of adjusted EPS. **Valuation remains discounted at approximately 7.2x forward P/E and a 4.15%-4.30% dividend yield**, while management plans $400 million of buybacks. The near-term setup is supported by pricing, conversion, retention, and capital returns, but Direct File and digital competition limit the multiple.