H&R Block, Inc. HRB is scheduled to report first-quarter fiscal 2020 results on Aug 28, after the bell.
The company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 3.6%. Shares of H&R Block have gained 7.2% year to date, outperforming the 4.5% rally of the industry it belongs to.
Let’s see how things are shaping up for the announcement.
The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $152.2 million, indicating year-over-year growth of 4.8%. The expected increase is likely to be driven by modest growth in the tax business and contribution from Wave Financial acquisition. The buyout has expanded H&R Block's product and client portfolio and strengthened its position in the large and expanding small business market.
The consensus estimate for the bottom line is pegged at a loss of 76 cents, indicating an increase from a loss of 72 cents incurred in the year-ago quarter. Loss is likely to widen as the company absorbs Wave Financial’s operating loss and related transactional costs.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if the companies are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
H&R Block has an Earnings ESP of 0.00% and Zacks Rank #3.
Stocks to Consider
Some better-ranked stocks in the broader Zacks Business Services sector include ICF International ICFI, Fiserv FISV and Charles River Associates CRAI, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here .
The long-term expected EPS (three to five years) growth rate for ICF, Fiserv and Charles River is 10%, 12% and 13%, respectively.
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