H&R Block (HRB) is back in focus after its third quarter fiscal 2026 update highlighted higher net average charges, growing assisted tax preparation contributions, and increased use of AI Tax Assist as key business drivers.

The recent third quarter update appears to have helped H&R Block regain some momentum, with the share price up 4.02% over one day and 8.26% over seven days, even though the 1 year total shareholder return is down 29% and the 5 year total shareholder return is up 84.97%. This points to a stock that has rewarded patient holders over time but is currently rebuilding confidence after a weaker stretch.

If this tax season story has you thinking about what else might be setting up for a shift, it could be a good moment to broaden your watchlist with 20 top founder-led companies

With H&R Block trading at $37.22 and an analyst price target of $39.50 plus a high intrinsic discount flag, you have to ask: is the stock still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 5.8% Undervalued

H&R Block is trading at $37.22 against a widely followed fair value narrative of $39.50, which points to a modest gap the market has not closed yet.

The ongoing growth in tax code complexity, illustrated by recent legislative changes (e.g., One Big Beautiful Bill) and the shift of more consumers, including higher-income and small business clients, to professional assistance, positions H&R Block to benefit from increased client demand and higher-value client segments. This is likely to drive sustained revenue growth and an improved earnings mix over time.

Curious what sits behind that fair value for H&R Block? The narrative leans on measured revenue growth, lower future margins and a higher earnings multiple than today. The full model spells out how those moving parts fit together.

Result: Fair Value of $39.50 (UNDERVALUED)

However, the H&R Block narrative also hinges on competitive and regulatory risks, such as ongoing market share losses and potential pressure from government backed free filing options.

Next Steps

With mixed sentiment around H&R Block, do you want to rely on the consensus or test the story yourself by weighing both sides quickly? To see the full list of what investors currently view as key risks and key positives, take a closer look at the 4 key rewards and 3 important warning signs

Looking for more investment ideas beyond H&R Block?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.