HRB
H&R Block, Inc.
$38.89
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 36.7% below fair value
You pay
$38.89
Bear
$49.15
Fair
$61.43
Bull
$73.72
Bear
$49.15
+26.4%
$4.55 × 12x P/E
Fair
$61.43
+58.0%
$4.55 × 15x P/E
Bull
$73.72
+89.6%
$4.55 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
8.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $41.00 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $61.43 per share.
Warnings
Wall Street's average price target is $41.00 (from 16 analysts). Our estimate is 66% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples