Here's Why Investors Must Add HRB Stock to Their Portfolios Now

Shares of H&R Block HRB have soared 50.3% over the past six months, outperforming the industry’s and the Zacks S&P 500 Composite's returns of 32.6% and 14.6%, respectively.

6-Month Share Price Performance

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What Makes HRB Stock an Attractive Pick?

Solid Rank: H&R Block currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.

Northward Estimate Revisions: Three estimates for fiscal 2027 and one for fiscal 2028 moved north in the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for fiscal 2027 and 2028 earnings has moved up  8.1% and 18.1% in the past 60 days, respectively.

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Strong Growth Prospects: The Zacks Consensus Estimate for revenues in fiscal 2027 is pegged at $4.1 billion, suggesting 4.6% year-over-year growth. For fiscal 2028, the figure is expected to increase 3.4% from the preceding year’s actual.

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The Zacks Consensus Estimate for HRB’s earnings for fiscal 2027 is pegged at $6.11 per share, indicating 15.1% year-over-year growth. Earnings are expected to register 6.6% growth in fiscal 2028.

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Growth Factors: Notably, we have identified three growth factors, including improvement in the Assisted Tax business, customer funnel enhancement, and Wave and small-business expansion.

In the first quarter of fiscal 2026, HRB’s top-line growth was supported by higher U.S. Assisted volumes and a higher net average charge (NAC). In the following quarters, assisted volume and NAC improved substantially. Therefore, in the third quarter of fiscal 2026, assisted volume grew 2.1% year over year and NAC increased 3.9%, indicating a sound volume-price mix. It is impressive to see the company’s assisted market shares stabilize during fiscal 2026 after declines in 2024 and 2025.

The company’s primary target was to improve the customer funnel in the first quarter of fiscal 2026. HRB witnessed improved conversion in company-owned offices during the second quarter of fiscal 2026. In the following quarters, the company logged stronger conversion, retention and product attachment. In fourth-quarter fiscal 2026, conversion improved 200 basis points (bps) year over year and retention experienced a 190-bps gain. These improvements should support stronger customer monetization, which is already entering the funnel, and improve client lifetime value.

Finally, Wave registered its second consecutive year of double-digit revenue growth at the end of fiscal 2026, backed by paid Pro-Tier subscriptions and payments. Integration of Wave’s SaaS capabilities with the company’s small-business offering could also strengthen year-round client relationships, solidifying revenue base beyond the core tax season.

Other Stocks to Consider

Some other top-ranked stocks from the broader Zacks Consumer Discretionary sector are Lifetime Brands LCUT and Carter's CRI, each currently flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lifetime Brands has a long-term earnings growth expectation of 14%. LCUT delivered a trailing four-quarter earnings surprise of 271.1%, on average.

Carter’s has a long-term earnings growth expectation of 2.7%. CRI delivered a trailing four-quarter earnings surprise of 415.9%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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