Out of the Gate: H&R Block shares rally after 4Q

The stock gained $1.40, or 6.4 percent, to $22.23 after the opening bell.

The Kansas City, Mo., company cited a record tax season and the sale of its troubled mortgage arm for the quarterly performance.

"It was a good quarter any way you measure it," Barrington Research analyst Alexander Paris Jr. said in a phone interview.

Paris said the results, annual dividend boost--up three cents to 60 cents--and fiscal 2009 guidance above Wall Street's expectations show "without a doubt" the fiscal fourth-quarter was a turning point.

The company's plan to begin buying back about $2 billion in the fiscal fourth quarter of 2009 is "pretty significant when you consider the market cap," he said.

The company's market cap is about $6.77 billion.

Despite the results, the company's balance sheet "still bears the scars of the subprime mess," Paris said. The company had faced many of the financial woes that befell other members of the sector, but sold Option One, its mortgage arm, to an affiliate of billionaire investor Wilbur Ross in April.

Paris currently rates shares "Market Perform" with a price target in the range of $24 to $25, implying he expects the stock to rise at least 15 percent over Friday's $20.82 close.

So far this year, shares have jumped 12 percent.