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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
H & R Block, Inc. (XNYS:HRB) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HRB
Name:
H & R BLOCK, INC. (XNYS:HRB)
Sector:
573.14M
Industry:
Personal Services
CEO:
Mr. Jeffrey Jones
Total Employees:
3,800
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -7.88% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF H & R BLOCK, INC.(HRB) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PERSONAL SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
44.47
One Month Price Target:
$44.63
Six Month Price Target :
$45.43
Likely Price in One Year's Time:
Ticker:
$46.4
Likely Trading Range Today Under (Normal Volatility)
$44.31
Price Upper limit ($) :
$44.75
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$41.87
This week:
$38.66
This month :
$32.85
Other Primary facts
Market Cap:
7.10B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
159.95M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.52%
-17.52%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$56.52
$50.90
$32.42
$38.04
Medium risk (<10%) entry points
Buy Call
Sell Call
$49.07
Buy Put:
Sell Put:
$47.87
$39.85
$41.07
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HRB
Sharpe Ratio:
4.44%
Comparison:
HRB, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 1459.88% higher than the industry
& ratio is 94.68% higher than the market/S&P 500 average
Average Returns/Yield of
HRB
Daily returns:
0.14%
Weekly returns:
0.69%
Monthly returns:
2.76%
Yearly returns:
0.17%
Comparison of returns:
Average annual returns/yield (last 3 years) is 19239.17% above industry average
Classification:
HRB, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.5
Statistical test of Returns:
HRB has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.91%
Weekly Volatility:
6.51%
Monthly Volatility:
13.03%
Yearly Volatility:
45.12%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.13%
Volatility in last five trading days has been -61.25% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.84%
Weekly VaR:
-13.07%
Monthly VaR:
-26.14%
How Much Can the price of
HRB
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-90.54%
This translates to price declining to:
$34.90
This translates to price declining to:
$4.21
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
HRB is a 84.46% riskier investment compared to the market/S&P 500 & is 58.03% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.95% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HRB
Beta in relation to market/S&P 500--0.65
Expected beta in 1 year's time:
0.562
Expected beta in 3 year's time:
0.794
Unlevered (debt free) Beta:
0.119
Beta in relation to Nasdaq (XNAS):
0.676
Beta in relation to all global stocks::
0.888
Beta Comparison & Analysis
Beta of competitors/peers::
1.489
Beta is -56.68% lower than peers
Average Industry Beta:
0.861
Beta is -25.10% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.256
Alpha is -388.04% below industry average alpha yield
Alpha is 1628% higher than market/& is unsustainably high
Analysis of Cost of Capital of
HRB
Equity cost of capital:
0.076
Equity cost of capital is -16.36% below industry mean WACC
Unlevered (without debt) cost of capital:
1.40%
Before-tax cost of debt:
4.70%
After-tax cost of debt:
3.72%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.72%
WACC is -3.37% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$29.64
Revenue growth rate per share of (3Y):
20.18
Annual revenue growth rate is 25.04% above the industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$10.92
Balance sheet equity growth per share: 8.76%
Equity growth rate per share is -337.97% lower than the industry
Debt per share
$10.83
EBITDA per share
$10.39
Valuation Analysis Today of
HRB
P/E Ratio:
12.58
P/E Ratio of Competitors/Peers:
6.65
P/E ratio is 89.19% higher than main peers & is -69.59% lower than the industry
-
-
Share value as per dividend discount (DDM) model: $25.91
Present value of the expected future dividends only: $15.08
P/S (Price to Sales ratio):
1.5
Price to sales ratio is -57.29% below the industry mean
P/B (Price to book value ratio):
20.18
Price to free cash flow: 4.07
-
Net income growth rate (3Y):
6.42%
Net income growth rate is -102.07% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 15.24%
Dividend yeild: 2.43%
Previous Dividend: $0.27
Previous adjusted dividend: $0.27
Previous Dividend: $1.08
Expected next dividend best case: $0.27
Expected next dividend worst case: $0.27
Average dividend payment (long-term): $0.26
Average dividend increase/decrease (growth rate) % per period: 0.38%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 09/06/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 06/08/2022
-
Dividend History:
2022-06-07--$0.27
2021-12-03--$0.27
2021-06-24--$0.27
2022-03-07--$0.27
2021-09-09--$0.27
2021-03-15--$0.26
Dividend growth rate is -76.67% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
491.67%
Net debt to equity ratio:
285.13%
Debt to assets ratio:
47.42%
Net debt to assets ratio:
27.50%
Debt-to-asset ratio is -42.35% below industry average
Ability to repay debt:
Interest coverage ratio:
18.23
Interest coverage ratio is -74.21% less than industry average
Looking forward:
Debt growth rate:
-47.46%
Annual debt growth is -1249% lower than industry average debt growth rate
Debt repayment rate in previous year: 69.37%
Analysis of Key Statistics
Correlation of price movement with the market:
0.547
Statistical significance of correlation:
HRB has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.482
Stock price is 13.50% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.482
Correlation of price movement with Nasdaq (^IXIC):
0.06
Covariance of price movement with the market:
0.102
Kurtosis
9.219
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.36
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HRB
Gross Profit Margin Ratio:
92%
Operating Profit Margin Ratio:
32.03%
Operating profit margin is 182.09% higher than the industry
Net Profit Margin Ratio:
92%
Effective Tax Rate:
10.06%
Effective tax rate is -57.84% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
363.29%
Return on equity (ROE) is -318.39% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
35.04%
Return on assets (ROA) is 350.73% higher than the industry
Financial Leverage:
1.9x
Current Ratio:
1.46
Current ratio is 43.49% above industry average
Cash Conversion Cycle (days):
46.1
Cash conversion cycle is 141.10% above industry average
The remaining useful life of property plant & equipment is: 2.0 years
Stock based compensation to net income ratio:
2.21%
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates 209% more revenue than industry average revenue per employee
EBITDA generated per employee:
437.5K
Each employee generates 317% more EBITDA than industry average revenue per employee
Profit generated per employee:
336.9K
Each employee generates 384% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
150.8K
Each employee generates 440% more free cash flow than industry average revenue per employee
Assets/Capital per employee
514.2K
Each employee generates 440% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HRB
ASBURY AUTOMOTIVE GROUP, INC. (XNYS:ABG)
AMERICAN EAGLE OUTFITTERS, INC. (XNYS:AEO)
VEONEER, INC. (XNYS:VNE)
MERITAGE HOMES CORPORATION (XNYS:MTH)
REVOLVE GROUP, INC. (XNYS:RVLV)
ALLISON TRANSMISSION HOLDINGS, INC. (XNYS:ALSN)
FOOT LOCKER, INC. (XNYS:FL)
LCI INDUSTRIES (XNYS:LCII)
TAYLOR MORRISON HOME CORPORATION (XNYS:TMHC)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�29%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.74B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.14B
2.60B
-
195.12M
908.17M
27.21M
175.32M
1.08B
-
91.21M
147.15M
1.66B
1.52B
1.28B
1.43B
143.92M
1.28B
Statement of Cash Flow
Date:
Period:
156.85M
Differed Income Tax :
- 22583.00K
Stock Based Compensation :
28.27M
Change in Working Capital :
- 193854.00K
Accounts Receivables:
-
Other Working Capital:
- 144058.00K
Other Non-Cash Items:
73.45M
Net Cash Provided by Operating Activities:
625.93M
Investments in PP&E:
-
Net Acquisitions:
- 15576.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2021
FY
934.25M
-
934.25M
531.24M
-
234.23M
1.70B
585.74M
757.66M
360.15M
-
182.85M
67.53M
1.95B
-
3.65B
198.08M
206.39M
287.40M
200.22M
558.39M
1.16B
1.73B
-
2.14B
-
3.30B
2.17M
248.51M
4.8M
96.94M
April 30, 2021 at 6:00:00 AM
3.22B
352.40M
3.65B
-
1.94B
1.0B
-
- 29947.00K
- 45523.00K
- 3925000.00K
-
- 191294.00K
- 195068.00K
1.90B
- 2408823.00K
18.32M
- 1810100.00K
1.06B
2.87B
625.93M
- 52792.00K
573.14M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
HRB
2023
2024
2025
2026
2027
$34.80
$36.31
$37.88
$39.53
$41.24