H&R Block is tumbling hard because of Trump's tax plan

  • H&R Block is dropping hard Wednesday in pre-market trading.

  • Disappointing sales guidance for 2019 seems to be the catalyst for the stock drop.

  • The new tax code could hurt the company's pricing, thus the 2019 guidance.

  • Watch H&R Block trade in real time here.

Shares of H&R Block are plumetting as much as 21% in pre-market trading Wednesday.

This is after the tax preparation company released 2019 guidance below what Wall Street had estiamted. Revenue guidance is $3.05 billion to $3.1 billion, compared to analysts projections of $3.14 billion.

The disappointing forecast is likely a result of the new tax code. Now that the tax rate is lower and the code is simpler, H&R Block has a bit of a problem. When client's tax filings are more complex, H&R Block has more pricing power. Now, filings will be more straightforward and prices could be driven downward.

Shares are down 10.65% on the year.

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