H&R Block: The Melting Ice Cube
H&R Block is experiencing a structural decline due to a shrinking customer base and reliance on buybacks. The company's earnings per share growth is largely driven by share repurchases rather than operational improvements. Analysts have assigned a Strong Sell rating with a price target indicating potential downside risk.
- ▪H&R Block faces a structural decline with a shrinking customer base.
- ▪60% of FY26 EPS growth is attributed to share repurchases rather than true operating leverage.
- ▪The company is vulnerable to AI substitution and commoditization as short-term gains from complexity will end by 2028.
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