H&R Block, Inc. HRB stock has been in a consolidation phase, losing a modest 2% over the past month compared with the industry's 2.3% growth.

This analysis will explore HRB’s performance to assess whether its current levels offer an attractive entry point for investors.

H&R Block's Strategic Growth Powers Future Success

H&R Block looks well-poised to gain from its five-year strategy, Block Horizons 2025. The company has successfully attained the three strategic imperatives of the strategy in 2024, and we expect to do so in 2025 as well. Within the Small Business imperative, it has witnessed revenue growth in Small Business tax, net average charge increased by 3%, and Wave has increased revenues by 6.8%.

Within the Financial Products imperative, Spruce has shown promising results in increasing customer sign-ups. The company’s Block Experience imperative is about the collaboration of digital tools and human expertise. In the DIY channel, paid volumes increased 6% year over year and NAC increased 7% in paid clients. In the Assisted channel, NAC rose 4%, and client satisfaction scores improved.

H&R Block’s mobile banking platform, Spruce, enables effective client acquisition and year-round user engagement. Spruce has resulted in a significant number of signups since its launch on June 30, 2024. It had nearly 476,000 sign-ups and was nearing a milestone of $1 billion in customer deposits. In August, the company announced that approximately 50% of fiscal 2024 deposits came from non-tax sources, and strong trends have been observed in the first quarter of fiscal 2025 as well. This is an encouraging development since it reduces its dependence on the tax business, which is highly seasonal and competitive.

HRB is a Dividend Spinner

H&R Block has a solid history of consistently paying dividends and repurchasing shares, demonstrating its commitment to rewarding shareholders. In fiscal years 2024, 2023 and 2022, the company distributed dividends of $179.8 million, $177.9 million and $186.5 million, respectively. During the same periods, it bought back shares worth $350.1 million, $550.2 million, and $563.2 million. These actions highlight H&R Block's focus on increasing shareholder value and its confidence in the business' long-term outlook.

The company’s strong cash position has enabled these efforts. H&R Block generated $657 million in free cash flow in fiscal 2024 and $752 million in fiscal 2023. This robust cash flow provides it with the flexibility to maintain its capital return programs.

HRB is a Must-Buy

H&R Block's strategic growth initiatives, strong liquidity, and shareholder-friendly policies make it a solid "Buy" for investors seeking both short-term momentum and long-term stability. The company’s continued focus on innovation and solid financial health supports a favorable outlook for stock appreciation.

HRB currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

A couple of other top-ranked are AppLovin APP and UiPath PATH.

AppLovin sports a Zacks Rank of 1 (Strong Buy) at present. It has a long-term earnings growth expectation of 20%. You can see the complete list of today’s Zacks #1 Rank stocks here.

APP delivered a trailing four-quarter earnings surprise of 26.2%, on average.

UiPath sports a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 19.3%. PATH delivered a trailing four-quarter earnings surprise of 38.8% on average.

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