H&R Block's Q1 Is A Reminder Of Operational Struggles
BTIG’s Mark Palmer mentioned that buyout rumors emerged once again regarding H & R Block Inc (NYSE: HRB) following the modest rise in the share price.
Palmer reiterated a Neutral rating on the company.
The analyst pointed out the Q1:17 results, released by H&R Block after market close on August 30, “was a reminder of the operating struggles that weighed on its shares during much of the past year.”
Palmer also explained fiscal Q1 usually represents less than 5 percent of the company’s annual revenues and below 15 percent of the annual expenses.
“However, management during the past couple of years had raised expectations around such off-season quarters by making “year round” — the generation of more robust revenues in the quarters that do not overlap with the tax season — an area of emphasis as it laid out its strategic plans,” according to the BTIG report.
The analyst stated that the Q1:17 results were disappointing, with adjusted loss per share of $0.55, as compared to the consensus expectations of adjusted loss per share of $0.53 but in line with the estimate.
The miss was due to lower-than-anticipated revenue of $125.2 million, which meaningfully missed the consensus and the estimate.
The EPS estimates for FY17 and FY18 have been lowered to reflect the lower expectations of revenue growth, given persisting uncertainty regarding client retention.
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Latest Ratings for HRB
|Nov 2016||BTIG Research||Downgrades||Neutral||Sell|
|Nov 2016||Morgan Stanley||Downgrades||Overweight||Equal-Weight|
|Aug 2016||BMO Capital||Maintains||Market Perform|
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