What Happened?
Shares of tax preparation company H&R Block (NYSE: HRB)
jumped 13% in the afternoon session after the company reported fiscal fourth-quarter 2026 results that surpassed Wall Street's expectations and provided an optimistic forecast for the upcoming year. For the quarter, H&R Block posted revenue of $1.14 billion, up 3% year-over-year and beating analyst forecasts, while its adjusted earnings per share of $2.38 topped the consensus estimate.
The positive momentum was reinforced by the company's full-year outlook. Management's revenue guidance of $4.14 billion at the midpoint came in above analysts' estimates. Furthermore, the company projected adjusted earnings per share for the 2027 financial year to be $6.14 at the midpoint, which also exceeded Wall Street's expectations. The strong performance and favorable guidance drove the significant upward movement in the company's share price.
The shares closed the day at $54.17, up 16.6% from the previous close.
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What Is The Market Telling Us
H&R Block’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for H&R Block and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 6.2% on the news that Stephens & Co. initiated coverage on the company with an Equal-Weight rating and a $47 price target. An Equal-Weight rating suggests the analyst believes the stock is fairly valued compared to its peers. The firm's $47 price target indicated moderate upside from the trading price at the time of the announcement.
The positive market reaction, despite the neutral-sounding rating, may also reflect the company's defensive profile and strong earnings reported in May, when it also raised its fiscal year 2026 guidance. The initiation of coverage by a new firm brings more visibility to the stock among investors.
H&R Block is up 25.4% since the beginning of the year, and at $53.42 per share, it has set a new 52-week high. Investors who bought $1,000 worth of H&R Block’s shares 5 years ago would now be looking at an investment worth $2,075.
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