H&R Block Inc. (HRB) Updating estimates to reflect front loaded F2027 investments

Equity Research 7 September 2026 | 9:01PM PDT

H&R Block Inc. (HRB) Updating estimates to reflect front-loaded F2027 investments

HRB 12m Price Target: $36.00 Price: $49.06 Downside: 26.6% SELL George K. Tong, CFA We are updating our estimates for H&R Block to reflect higher | Goldman Sachs & Co. LLC near-term investment spending and a greater benefit from share Sami Nasir, CFA repurchases following the recent decline in HRB’s share price. We | Goldman Sachs & Co. LLC reduce our F1Q 2027 operating income estimate by ~$9mn, primarily reflecting technology investments to prepare systems for Alex Lakritz | Goldman Sachs & Co. LLC the upcoming tax season, AI partnerships, initiatives supporting the company’s small business strategy and related consulting fees. To a lesser extent, our revised F1Q forecast incorporates higher Key Data _____________________________________ Market cap: $6.2bn occupancy costs following HRB’s purchase of 164 franchise offices in Enterprise value: $6.8bn 3m ADTV: $95.0mn F2026, which shifts these locations into the company-owned cost United States base. We assume the increased F1Q spending will be mostly Americas Information and Business Services M&A Rank: 3 recouped in F3Q, with the remainder recovered across F2Q and F4Q, GS Forecast __________________________________ resulting in essentially unchanged FY 2027 operating income. The 6/26 6/27E 6/28E 6/29E

changes reduce our F1Q adjusted EPS estimate by $0.06 to ($1.39). Revenue ($ mn) New Revenue ($ mn) Old 3,945.4 3,945.4 4,131.1 4,131.1 4,320.5 4,320.5 4,518.5 4,518.5 We also update our share repurchase assumptions to reflect HRB’s EBITDA ($ mn) 1,056.9 1,124.8 1,197.8 1,277.5 EBIT ($ mn) 954.6 1,028.8 1,099.8 1,177.5 lower share price, resulting in a greater number of shares EPS ($) New repurchased under the company’s planned ~$400mn program and EPS ($) Old P/E (X) 7.9 8.0 7.0 6.0 raising our EPS estimates by $0.02 in F2027, $0.07 in F2028 and Dividend yield (%) 4.0 3.8 4.1 4.5 $0.15 in F2029. We retain our Sell rating, as HRB’s improving Net debt/EBITDA (X) 0.5 0.5 0.4 0.2

execution, pricing power and capital returns are balanced by a 6/26 9/26E 12/26E 3/27E low-growth tax preparation market, elevated investment EPS ($)

requirements and uncertainty around the longer-term competitive GS Factor Profile ______________________________ Growth implications of AI. Financial Returns

Multiple Valuation and risks Integrated

We raise our 12-month price target from $33 to $36 based on 4.5x Percentile 20th 40th 60th 80th 100th

(4.2x prior) our NTM + 1YR EBITDA estimate of $1,198mn HRB relative to Americas Coverage

(unchanged), NTM average net debt of $1,119mn and NTM shares HRB relative to Americas Information and Business Services

outstanding of 119.6mn. We raise our target multiple to reflect peer Source: Company data, Goldman Sachs Research estimates. See disclosures for details. group multiple appreciation. Our target EV/EBITDA multiple comes below HRB’s 10-year average NTM EV/EBITDA multiple of 7.6x and

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs H&R Block Inc. (HRB)

H&R Block Inc. (HRB) Balance Sheet ($ mn) _______________________________________ SELL Rating since Jan 30, 2019 6/26 6/27E 6/28E 6/29E Cash & cash equivalents 977.9 1,085.0 1,200.6 1,331.1 Accounts receivable Inventory -- -- -- -- Ratios & Valuation __________________________________________ Other current assets /26 6/27E 6/28E 6/29E Total current assets 1,125.6 1,240.9 1,364.4 1,502.6 P/E (X) 7.9 8.0 7.0 6.0 Net PP&E EV/EBITDA (X) 5.7 5.8 5.0 4.3 Net intangibles EV/sales (X) 1.5 1.6 1.4 1.2 Total investments 0.0 0.0 0.0 0.0 FCF yield (%) Other long-term assets 1,722.4 1,722.4 1,722.4 1,722.4 EV/DACF (X) 6.4…