INTU - H&R Block: Q3 Earnings Beat Both Top And Bottom Lines

2024-05-27 02:50:48 ET

Summary

• H&R Block just reported an exceptionally strong Q3 quarter, showing the first real revenue growth in 3 years.
• The business is showing pricing power and operating leverage. Good expense control coupled with share repurchases turned 4% revenue growth into a 44% increase in earnings versus the prior year.
• The company continues to return 100% of earnings to shareholders. It reduced the share count 9% in the past year with some very well-timed repurchases.
• 15% EPS growth over the next 2 years would have FY26 EPS around $6. A 15x multiple could put HRB at $90/share.
• The 7% dip in the past week presents a great buying opportunity.

H&R Block ( HRB ) just turned in an exceptionally strong, game changing Q3 quarter. Despite this, shares have recently given up much of the post-earnings gains, dropping 3.6% this Friday, seemingly following Intuit ( INTU ) lower after its Q4 Guidance disappointed . INTU, which trades at 36x earnings, is not even in the same valuation ballpark as HRB, but markets don't always make sense, especially on a low volume Friday heading into a holiday weekend....

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