Hewitt Can Do It

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These are taxing times -- and Jackson Hewitt (NYSE: JTX) wouldn't have it any other way. The country's second-largest tax filing specialist after H&R Block (NYSE: HRB) announced encouraging numbers for last month's tax-filing frenzy, and it's upping its profit guidance as a result.

The company filed 10.2% more tax returns than it did a year earlier. Stacking the good news, the typical return also generated 13.5% more revenue for Jackson Hewitt. The showing laps the tax-prep player's original projections, which called for it to file 8% to 10% more returns and generate between 7% and 10% more on each return.

To be fair, as of the end of the January fiscal quarter, the company had 10% more offices open. In other words, individual Jackson Hewitt offices likely weren't that much busier year over year. It's still a good sign, especially given the higher filing fees that the company was able to generate.

Jackson Hewitt's last fiscal year ended in April. Back in March, the company was sticking to a forecast that called for annual earnings per share to clock in between $1.51 to $1.56. That has now been lifted to a range of $1.57 to $1.59.

Jackson Hewitt is an intriguing company. Most investors might think that software companies like Intuit (Nasdaq: INTU) would be eating at its flagship tax-preparation business, but it's growing nonetheless. The company also hasn't had to cope with the embarrassing admission that it understated its own taxes, as rival H&R Block did earlier this year.

With more than 6,000 locations, most of them franchised, Jackson Hewitt has really sneaked up on the corporate landscape. I know that I've driven around town and had to do a double-take when I see a Jackson Hewitt office where I know it didn't exist before. I've grown to love the empowerment of doing my own taxes with a convenient, dedicated software program, but I really respect Jackson Hewitt's ability to grow in a sector that I figured would only be downhill at this point.

It certainly doesn't hurt that Jackson Hewitt is raising its target during the same week that H&R Block, sorely in need of focus and restraint, watered down its guidance because of shortcomings at its mortgage business. Investors have to pay a valuation premium to buy Jackson Hewitt over H&R Block, but if the past has been any indication, it's the kind of driven pedigree that's worth paying up for.

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Longtime Fool contributor Rick Munarriz forks over his taxes gladly. However, he does not own shares in any company mentioned in this story.The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.