What to Expect When Intuit (INTU) Reports Q2 Earnings?
Intuit Inc. INTU is set to report second-quarter fiscal 2017 results on Feb 23. Last quarter, the company posted a positive earnings surprise of 35.29%. Notably, the stock has outperformed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 77.92%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Intuit reported better-than-expected fiscal first-quarter 2016 results. Its performance also improved on a year-over-year basis. Though the company posted a loss in the quarter, it fared better than Zacks Consensus Estimate. Also, revenues surpassed the same.
We are positive on Intuit’s growing SMB exposure and believe that its strategic acquisitions will positively impact the performance of the segment. Increased adoption of its cloud-based services and products is another positive.
Intuit has also restructured its business to focus on the QuickBooks services. However,its investments in this portfolio are likely to hurt profitability.
Moreover, rising competition from payroll solution providers such as Paycom Software Inc. PAYC and Automatic Data Processing is a concern, especially considering the seasonality of Intuit’s tax business and the ongoing economic uncertainty.
Intuit Inc. Price and EPS Surprise
Intuit Inc. Price and EPS Surprise | Intuit Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that Intuit is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Earnings ESP for Intuit is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 6 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Intuit’s Zacks Rank #2, when combined with its 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or #5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of companies which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Concho Resources Inc. CXO, with an Earnings ESP of +66.67% and a Zacks Rank #3.
FirstEnergy Corp. FE, with an Earnings ESP of +2.56% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
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