Stock of HRB soared by 7.6% following earnings release - Can Q4 match the momentum?
H&R Block Inc. (HRB) has recently reported its fiscal fourth-quarter earnings for 2025, revealing a mixed performance. The company's shares have shown a pattern of modest post-earnings returns, underperforming the broader market in recent times.
Over the past year, HRB has gained about 3.1%, while the S&P 500 experienced an 8.4% increase, and the US market saw a 15.8% return[1][2]. Regarding quarterly earnings surprises, HRB surpassed consensus EPS estimates twice in the last four quarters but recently missed Q4 2025 earnings expectations by a significant margin—reporting $2.27 per share versus the estimated $2.81, a surprise of -19.22%[1][3][4].
Despite a slight revenue beat at $1.11 billion versus expected $1.07 billion[1][3], the earnings miss and the overall modest earnings growth outlook for the coming year (expected earnings decline of about 2.86% from $5.25 to $5.10 per share) have led to a cautious market reaction[3][4].
Analysts forecast earnings of $2.83 per share and revenue of $1.07 billion for the fiscal fourth quarter. However, the company delivered $2.27 per share, indicating a 50% year-over-year increase in adjusted earnings and a slight rise in sales compared to the previous year's results[1][3].
The recent earnings report and trajectory suggest the stock may continue to trade in line with the broader market rather than outperform it in the near term. Analysts’ expectations for upcoming quarters remain mixed, reflected in a Zacks Rank #3 (Hold) rating, tempered by ongoing estimate revisions, which historically correlate strongly with near-term stock performance[4].
In the context of post-earnings returns, historically, H&R Block shares have experienced a boost after earnings, increasing half the time post-results, with an average one-day gain of 7.6% and peaks reaching as high as 20%. The correlation between 1-day (1D) and 5-day (5D) post-earnings returns for H&R Block is summarized, with positive one-day post-earnings returns occurring approximately 50% of the time over the last five years[1][3].
However, when considering data from the last 3 years, the ratio falls to 36% for positive one-day post-earnings returns[1][3]. This trend is based on a 5-year and 3-year history of the correlation between 1D and 5D post-earnings returns[1][3].
For a strategy that carries less risk, using correlations between short-term and medium-term returns following earnings, traders might take a "long" position for the next 5 days following a positive 1D post-earnings return[1][3]. It is essential to note that historical data comparing the post-earnings performance of H&R Block stock with that of peers who reported their earnings just before H&R Block is provided for a fair comparison[1][3].
H&R Block Inc. (NYSE: HRB) currently has a market capitalization of $7.4 billion[1]. The company will announce its fiscal fourth-quarter earnings on August 12, 2025.
[1] InvestorPlace [2] MarketWatch [3] Yahoo Finance [4] Zacks Investment Research
- Investors looking at H&R Block's (HRB) financial performance following the recently released fiscal fourth-quarter earnings report might observe a pattern of modest post-earnings returns, given the company's shares have underperformed the broader market in recent times.
- For those engaged in investing in the tax preparation company H&R Block, analyzing its business, revenues, earnings, and financial projections is essential, as the recent earnings miss and cautious market reaction could indicate a potential continuation of subpar performance compared to the broader market in the near term.
