U.S. Markets closed
  • S&P 500

    +8.26 (+0.19%)
  • Dow 30

    +13.36 (+0.04%)
  • Nasdaq

    +49.09 (+0.35%)
  • Russell 2000

    +24.40 (+1.06%)
  • Crude Oil

    +0.49 (+0.70%)
  • Gold

    -16.90 (-0.89%)
  • Silver

    +0.02 (+0.07%)

    -0.0071 (-0.5811%)
  • 10-Yr Bond

    +0.0030 (+0.21%)
  • Vix

    -0.45 (-2.80%)

    -0.0060 (-0.4221%)

    +0.2870 (+0.2625%)

    -1,074.69 (-2.91%)
  • CMC Crypto 200

    -17.62 (-1.87%)
  • FTSE 100

    +45.88 (+0.65%)
  • Nikkei 225

    -9.83 (-0.03%)

Intuit (INTU) Gets Clearance From DOJ to Acquire Credit Karma

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Intuit INTU and Credit Karma jointly announced on Wednesday that they have entered into a consent agreement with the U.S. Department of Justice (DOJ), which gives them clearance for their previously announced merger. They have also entered into an Assurance of Discontinuance with the New York State Attorney General.

Further, the companies announced Credit Karma’s deal with Square SQ, under which the former would sell its Tax business to the latter. The deal is contingent upon the completion of Intuit’s acquisition of Credit Karma. Additionally, the companies will provide certain transition services to Square, to facilitate the smooth business transition.

Earlier, in February, Intuit inked an agreement to acquire Credit Karma, in a cash-stock deal worth $7.1 billion. However, the deal raised antitrust concerns as the acquisition would eliminate a major competitor for Intuit’s Turbo Tax product, which is already a dominant player in the tax preparation software space, with a market share of approximately 67%.

Markedly, Intuit’s shares have rallied 33.8% year to date compared with the Zacks Computer - Software industry’s growth of 32.1%.

Intuit Inc. Price and Consensus


Intuit Inc. Price and Consensus
Intuit Inc. Price and Consensus

Intuit Inc. price-consensus-chart | Intuit Inc. Quote

Acquisition of Credit Karma to Aid Prospects

The acquisition of Credit Karma is expected to aid the expansion of Intuit’s customer base by adding 110 million Credit Karma customers to its existing 57-million user base.

Moreover, in the recently concluded quarter, this Zacks Rank #3 (Hold) company posted customer growth of 11%, which was the strongest in the past four years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Notably, increasing demand for personal finance management solutions amid the coronavirus outbreak is expected to be a major growth driver. According to data cited by the company, with household debt in the United States reaching $14.3 trillion, 62% of American consumers are surviving on paycheck to paycheck and 33% have lost their income during the pandemic.

The acquisition will help more than 100 million customers manage their personal finance requirements. It will enable the customers to find suitable financial products, give them access to high-yield savings accounts, help them pay down their debts and maximize their tax refunds.

Expansion of The QuickBooks Platform to Drive Growth

Notably, earlier in November, Intuit launched HubSpot for QuickBooks, which adds enhancements to the QuickBooks platform by providing integrated CRM solutions to provide small businesses with better financial management solutions.

Further, it introduced new capabilities to the platform such as QuickBooks Insurance and 401 (k) powered by Guideline and launched an omnichannel sales platform, QuickBooks Commerce.

The company also integrated with Amazon’s AMZN Amazon Business, to import all Amazon Business purchases to QuickBooks automatically. Further, it extended partnership with Bill.com Holdings BILL, to add advanced bill-payment and workflow-automation solutions for QuickBooks Online Advanced customers.

Moreover, the formation of a new AI-driven consumer finance platform post Credit Karma’s acquisition will drive growth for Intuit’s robust product portfolio, which includes TurboTax, QuickBooks and Mint.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
Square, Inc. (SQ) : Free Stock Analysis Report
Bill.com Holdings, Inc. (BILL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research