In just the last month, H and R Block shares dropped a whopping 21% following an unsatisfactory third quarter that led to investors fleeing to save themselves. On the other hand, it is believed that the fourth quarter could turn everything around and H and R Block stock can provide incredible investment opportunities for investors with a keen eye.
While the third quarter generally performs lower than other quarters every year, this year's loss was much more than ever anticipated. Its revenue dropped below the expected $502 million to approximately $475 million. That is a $79 million loss, which is far greater than the $37 million loss in 2015, during the same quarter. If that's not enough, the company also demonstrated four consecutive years of decreased volume, which worried its stockholders.
So the question is, is this an income opportunity for a savvy investor? We believe it may be. As disposable income increases this tax season, the public feels there is less urgency to complete their tax returns early. As a result, the possibility remains that the fourth-quarter earnings may be much higher than expected. The potential that exists for greater than anticipated earnings makes H and R Block stock attractive in this particular quarter.
