Death and taxes are the only two certainties in life as the handsome antagonist played by Brad Pitt was told in Meet Joe Black in 1998. And indeed, H&R Block, the biggest tax prep company in the world, has survived over 70 years of technological disruption for the simple reason that people need a competent accountant to do their taxes.
In the latest iteration of “the tax prep business is dead” narrative, HRB stock is down 29% this year already due to AI disruption fears, and that’s on top of the 17.5% it lost in 2025. But just like the internet, AI is only a tool and you still need someone with expertise to use it properly. And in addition to its generous dividend and buybacks, expertise is precisely what H&R Block is offering. At just over 6 times this year’s earnings, the stock is attractive even without looking at the Elliott Wave chart below.
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It reveals that the stock price’s behavior since the pandemic low in 2020 has produced a complete Elliott Wave cycle. It consists of a five-wave impulse, marked 1-2-3-4-5, where two lower degrees of the trend are visible within wave 3, and a simple A-B-C zigzag correction. Wave ‘v’ of 3 was extended and then almost entirely erased by wave 4. Similarly, wave 5 was extended and then entirely erased by the current retracement.
If this count is correct, H&R Block could make a new low in wave ‘v’ of C in the mid-$20s per share. Instead of extrapolating the recent past into the future, however, we think income-oriented investors should take advantage of the market’s pessimism to buy a solid business on the cheap. A bullish reversal can be expected in the not-so-distant future.
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