Value
9.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.7 |
| P/S | 9.5 |
| EV/EBITDA | 8.4 |
| Fwd P/E | 9.8 |
| PEG | 9.9 |
- ▸Forward P/E: 6.2x
- ▸PEG: 0.51
- ▸Attractively valued
HRB · Why this verdict
Why H&R Block (HRB) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A consumer tax-services company with compelling valuation metrics (forward P/E of 6.2x, PEG of 0.51), 19% net margins, and a recent three-quarter earnings beat streak is offset by a confirmed price downtrend declining at 5.3% per month, 23% short interest, and two high-severity counterparty concentration risks — the setup offers roughly 7% return to the next resistance level but lacks the technical catalyst needed to close that gap near-term.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A forward P/E of 6.2x and a PEG ratio of 0.51 place this business among the least expensive names in its peer group on an earnings-growth-adjusted basis, providing a meaningful margin of safety if earnings hold at current levels. Valuation breakdown | Forward earnings estimates hold or rise over the next two fiscal quarters, keeping the forward P/E below 10x and confirming that the low multiple reflects mispricing rather than impending earnings erosion. | →Stable |
| CounterA low multiple can reflect secular disruption risk rather than undervaluation; if the market has correctly priced in long-term earnings pressure from digital competition or counterparty dependency, the inexpensive multiple may prove a value trap. | ||
Net margins of 19% and a Piotroski F-Score of 8 out of 9 reflect a capital-efficient operation with disciplined cost management and strong fundamentals across profitability, leverage, and operating-efficiency measures. Quality breakdown | Net margins remain above 15% for the next two fiscal quarters, confirming that the high-margin profile is structural rather than cyclical. | →Stable |
| CounterBest-in-class margins in a seasonal, highly concentrated business can compress rapidly if a key counterparty relationship changes terms or if the company is required to invest significantly in technology to defend its competitive position. | ||
Three consecutive quarterly earnings beats — following an older miss — suggest that management's guidance discipline has tightened and execution has improved, with the most recent beat delivering 4.33% above consensus. Earnings | The beat streak extends through the next earnings report (due roughly 56 days out), with an earnings surprise of at least 2% above consensus. | →Stable |
| CounterA three-quarter beat streak following a significant miss may reflect conservative guidance reset rather than structural improvement; the most recent beat at 4.33% is narrowing compared to the 11.28% beat two quarters prior, suggesting the pace of outperformance may be decelerating. | ||
The stock is in a confirmed downtrend — below the 200-day moving average with the trend declining at 5.3% per month and a death cross in force — creating a technical headwind that attracts additional selling pressure and keeps momentum-oriented investors on the sidelines. Momentum breakdown | Price crosses above the 200-day moving average within the next 6 months and holds above for at least 5 consecutive sessions, reversing the confirmed downtrend. | →Stable |
| CounterHigh-quality businesses with low multiples can remain in technical downtrends for extended periods before reverting sharply; waiting for a technical reversal may mean missing the bulk of any fundamental-driven re-rating. | ||
Two high-severity counterparty concentration risks — a banking partner and a technology provider — create meaningful single-point-of-failure exposure; if either relationship were disrupted or repriced, the core service offering could be materially impaired with limited near-term alternatives. Bear case | Over the next 12 months, public filings disclose that no single counterparty represents more than 20% of total operating capacity or revenue flow, demonstrating active mitigation of the concentration exposure. | →Stable |
| CounterLong-term counterparty relationships typically carry contractual protections and high switching costs that make abrupt disruption unlikely; concentration in stable partnerships may reflect strategic alignment rather than unmanaged operational risk. | ||
A forward P/E of 6.2x and a PEG ratio of 0.51 place this business among the least expensive names in its peer group on an earnings-growth-adjusted basis, providing a meaningful margin of safety if earnings hold at current levels.
→StableValuation breakdown
- Expectation
- Forward earnings estimates hold or rise over the next two fiscal quarters, keeping the forward P/E below 10x and confirming that the low multiple reflects mispricing rather than impending earnings erosion.
CounterA low multiple can reflect secular disruption risk rather than undervaluation; if the market has correctly priced in long-term earnings pressure from digital competition or counterparty dependency, the inexpensive multiple may prove a value trap.
Net margins of 19% and a Piotroski F-Score of 8 out of 9 reflect a capital-efficient operation with disciplined cost management and strong fundamentals across profitability, leverage, and operating-efficiency measures.
→StableQuality breakdown
- Expectation
- Net margins remain above 15% for the next two fiscal quarters, confirming that the high-margin profile is structural rather than cyclical.
CounterBest-in-class margins in a seasonal, highly concentrated business can compress rapidly if a key counterparty relationship changes terms or if the company is required to invest significantly in technology to defend its competitive position.
Three consecutive quarterly earnings beats — following an older miss — suggest that management's guidance discipline has tightened and execution has improved, with the most recent beat delivering 4.33% above consensus.
→StableEarnings
- Expectation
- The beat streak extends through the next earnings report (due roughly 56 days out), with an earnings surprise of at least 2% above consensus.
CounterA three-quarter beat streak following a significant miss may reflect conservative guidance reset rather than structural improvement; the most recent beat at 4.33% is narrowing compared to the 11.28% beat two quarters prior, suggesting the pace of outperformance may be decelerating.
The stock is in a confirmed downtrend — below the 200-day moving average with the trend declining at 5.3% per month and a death cross in force — creating a technical headwind that attracts additional selling pressure and keeps momentum-oriented investors on the sidelines.
→StableMomentum breakdown
- Expectation
- Price crosses above the 200-day moving average within the next 6 months and holds above for at least 5 consecutive sessions, reversing the confirmed downtrend.
CounterHigh-quality businesses with low multiples can remain in technical downtrends for extended periods before reverting sharply; waiting for a technical reversal may mean missing the bulk of any fundamental-driven re-rating.
Two high-severity counterparty concentration risks — a banking partner and a technology provider — create meaningful single-point-of-failure exposure; if either relationship were disrupted or repriced, the core service offering could be materially impaired with limited near-term alternatives.
→StableBear case
- Expectation
- Over the next 12 months, public filings disclose that no single counterparty represents more than 20% of total operating capacity or revenue flow, demonstrating active mitigation of the concentration exposure.
CounterLong-term counterparty relationships typically carry contractual protections and high switching costs that make abrupt disruption unlikely; concentration in stable partnerships may reflect strategic alignment rather than unmanaged operational risk.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 10.0 |
| Gross margin | 4.9 |
| Op margin | 10.0 |
| Net margin | 9.5 |
| Current ratio | 4.0 |
| FCF quality | 6.4 |
| Moat | 5.6 |
| Piotroski F | 8.9 |
- ▸Strong margins: 19%
- ▸Strong Piotroski F-Score: 8/9
Growth
5.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.8 |
| EPS growth | 6.8 |
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 3.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.8%/30d — confirmed downtrend
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 5.0 |
| Price target | 6.4 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.2 |
| quality rank | 8.3 |
| growth rank | 1.7 |
- ▸Best-in-class margins
Technical
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.6 |
| support resistance | 6.1 |
| 52w position | 2.8 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 4.2 |
| volatility | 4.1 |
| put call | 0.0 |
| implied vol | 5.3 |
| max pain risk | 7.0 |
| beta | 10.0 |
| news risk | 6.0 |
- ▸High short interest: 23%
- ▸Elevated put/call: 4.60
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 2.3 |
| dividend safety | 7.0 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 462.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:47d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.5<4.5
- ASYMMETRY:-1.0=NEGATIVE
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
-0.98
Upside
-6.6%
Downside
6.7%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 42 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $4.6B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Value at 9.6; weakest: Momentum at 3.5. No conviction either direction.
The strongest dimensions are Value at 9.6, Quality at 7.4, and Sentiment at 5.8; the weakest are Momentum at 3.5, Risk (lower is worse) at 4.6, and Insider at 5.0. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -0.98 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A forward P/E of 6.2x and a PEG ratio of 0.51 place this business among the least expensive names in its peer group on an earnings-growth-adjusted basis, providing a meaningful margin of safety if earnings hold at current levels.
Trip ifForward P/E multiple expands above 12x as EPS estimates are cut by more than 20% from current levels.
- P2Net margins of 19% and a Piotroski F-Score of 8 out of 9 reflect a capital-efficient operation with disciplined cost management and strong fundamentals across profitability, leverage, and operating-efficiency measures.
Trip ifNet margins compress below 12% for 2 consecutive fiscal quarters.
- P3Three consecutive quarterly earnings beats — following an older miss — suggest that management's guidance discipline has tightened and execution has improved, with the most recent beat delivering 4.33% above consensus.
Trip ifEPS surprise falls below 0% for 2 consecutive reported quarters.
- P4The stock is in a confirmed downtrend — below the 200-day moving average with the trend declining at 5.3% per month and a death cross in force — creating a technical headwind that attracts additional selling pressure and keeps momentum-oriented investors on the sidelines.
Trip ifPrice crosses above the 200-day moving average and holds above for 5 consecutive trading sessions.
- P5Two high-severity counterparty concentration risks — a banking partner and a technology provider — create meaningful single-point-of-failure exposure; if either relationship were disrupted or repriced, the core service offering could be materially impaired with limited near-term alternatives.
Trip ifCompany discloses that no single counterparty accounts for more than 20% of total revenues or operating capacity in the next annual SEC filing.