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BREAKING:

$535B CANADA BUDGET PROJECTS $39.8B DEFICIT, AIMS TO RESTORE ECONOMIC FAIRNESS

It seeks to ease the housing and affordability crisis by making older, wealthier Canadians pay more

Here's Why You Should Hold on to H&R Block (HRB) Stock Now

Zacks Equity Research
·2 min read

We believe that H&R Block, Inc. HRB with a long-term expected growth rate of 10% and a market cap of $2.7 billion, is a stock that investors should retain in their portfolio.

Aiding Factors

The main drivers of the H&R Block's performance post the coronavirus pandemic are likely be digital enablement of business, client addition and retention in both Assisted and DIY, greater usage of AI, and machine learning for product improvement as well as expansion in small business.
The company’s cash generation capacity enables it to pursue opportunities that exhibit true potential. H&R Block exited the fourth quarter of fiscal 2020 with cash and cash equivalents balance of $2.66 billion compared with $192.34 million at the end of the prior quarter.

Strategic investments in price, technology and operational excellence Is likely to help the company achieve overall objectives of clients, revenues and earnings growth over the long term.

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Current Headwinds

The company’s performance is currently under pressure due to a delayed tax season in response to the coronavirus pandemic. The deadline for Federal filing has been extended to Jul 15. Moreover, as small businesses have been badly hit by the pandemic, volumes and revenues through the company’s Wave payments platform are low.

HR Block, Inc. Revenue (TTM)

HR Block, Inc. Revenue (TTM)
HR Block, Inc. Revenue (TTM)

HR Block, Inc. revenue-ttm | HR Block, Inc. Quote

Zacks Rank and Stocks to Consider

H&R Block currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are DocuSign DOCU, Elastic N.V. ESTC and SailPoint Technologies SAIL. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected earnings per share (three to five years) growth rate for DocuSign, Elastic N.V. and SailPoint is at 31.2%, 26% and 15%, respectively.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
HR Block, Inc. (HRB) : Free Stock Analysis Report
 
SailPoint Technologies Holdings, Inc. (SAIL) : Free Stock Analysis Report
 
DocuSign Inc. (DOCU) : Free Stock Analysis Report
 
Elastic N.V. (ESTC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research