Thursday, April 4, 2013

Why H&R Block Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, tax prep specialist H&R Block (NYSE: HRB  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at H&R Block, and see what CAPS investors are saying about the stock right now.

H&R Block facts

Headquarters (founded)

Kansas City, Mo. (1946)

Market Cap

$7.8 billion

Industry

Personal services

Trailing-12-Month Revenue

$2.6 billion

Management

CEO William Cobb (since 2011)

CFO Gregory Macfarlane (since 2012)

Return on Equity (average, past 3 years)

49.9%

Cash/Debt

$418.4 million / $1.3 billion

Competitors

Intuit

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 34% of the 542 members who have rated H&R Block believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, ayekappy, highlighted H&R Block as a rather untimely opportunity:

Horrible company with a failing business model. Probably won't be getting new customers and will lose a lot of existing customers due to their famous error and essentially lying about what % of people got their returns back already. They may have to hide under TaxAct to make people forget about their stained name. Next quarter's numbers should be pretty ugly compared to normal since the glitch was heard about earlier in the tax season, so they already started bleeding customers this tax season.

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