Actions of H & R Block, Inc. (HRB – Free Report) rose 8% in the last six months, compared to a 24.5% drop in the sector.
The company recently released its second quarter results in fiscal year 2019, the loss per share from continuing operations being 83 cents and less than Zacks' consensus estimate of a loss of 92 cents. The figure was wider by 12 cents yoy. Revenues reached $ 149 million, $ 10 million higher than the consensus, and an improvement of 5.7% over the previous year.
The surprise story of H & R Block seems impressive. He has beaten the estimates in each of the last four quarters, averaging 8.7%. For the third quarter of fiscal year, the consensus estimate was unchanged, with a loss of 52 cents in the last 30 days.
What motivates H & R Block?
The tax sector has been growing steadily since 2005 in the aid and DIY networks. The momentum is expected to continue in the coming years. H & R Block is well positioned to take advantage of industry opportunities. In its assisted activities, the company focuses on investing in price, development and delivery, as part of a clear brand promise. In the DIY sector, H & R Block continues to focus on competitive pricing and investments in product innovation and improved user experience.
H & R Block will invest in three major areas in 2019: awards, technology and operational excellence. On the price front, it focuses on the reduction to achieve competitive prices.
Using technology, H & R Block is building a new tax engine that can consolidate multiple systems, invest in multi-channel capabilities to streamline the cross-platform client experience, move physical data centers to the cloud, and to optimize the architecture and the data platform. In terms of operational excellence, the company is trying to improve the execution of standard operating procedures to improve the quality and consistency of service delivery.
These initiatives, with strong cash flow, should enable the company to achieve customer objectives, revenue and long-term earnings growth.
With increased investments in technology and operations, H & R Block is expected to see increased costs. This, in turn, is expected to weigh on its bottom line by 2019.
The activity of the company is strongly affected by seasonality. It generates a large majority of its income and makes profits in the fourth quarter of fiscal year, with most of its clients filing their tax returns from January to April. Products remain significantly lower and the company suffers a loss in the first three quarters of the year.
Zacks Rank & Stocks to Consider
H & R Block currently has a Zack # 3 ranking (pending).
You can see You will find here the complete list of Zacks actions # 1 of the current rank (strong purchase).
Republic Services (RSG – Free Report), Waste Connections (WCN – Free Report) and Navigant Consulting (NCI – Free Report) are among the top ranked titles in the Zacks Business Services branch. ). The expected long-term growth rate of Republic Services, Waste Connections and Navigant's EPS (three to five years) is 10.7%, 11.7% and 13.5%, respectively.
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