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Intuit (INTU) Reiterates Q1 & FY22 Outlook Ahead of Investor Day

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Intuit INTU reiterated its first-quarter and full-fiscal 2022 outlook ahead of the Virtual Investor Day presentation held on Sep 30.

For the fiscal first quarter, Intuit continues to expect revenue growth between 36% and 38% on a year-over-year basis. The company also reaffirmed its GAAP and non-GAAP earnings per share guidance range of 14-19 cents and 94-99 cents, respectively.

For fiscal 2022, this business and financial management solution provider still projects revenues in the band of $11.05-$11.20 billion, calling for year-over-year growth of 15-16%. Notably, the top-line expectations for both the periods, i.e. first-quarter and fiscal 2022 include revenue contributions from the recently-acquired Credit Karma business.

The operating income on a GAAP and non-GAAP basis for fiscal 2022 is anticipated to be in the range of $2.605-$2.680 billion and $4.050-$4.125 billion, respectively. GAAP earnings per share are expected in the range of $7.46-$7.66. Non-GAAP earnings are still projected between $11.05 and $11.25 per share, indicating a year-over-year increase of 13-16%.

Intuit Inc. Price and Consensus

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

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

Intuit anticipates revenue growth across all its business segments during fiscal 2022. Sales at its Small Business and Self-Employed Group division are projected to increase in the 12-14% band, while Consumer Group business unit is likely to register 10-11% growth, year over year.

Its ProConnect Group revenues are expected to be up 1-2% year on year. Moreover, the newly-acquired Credit Karma business is predicted to generate revenues between $1.345 billion and $1.380 billion during fiscal 2022.

Intuit is benefiting from the strong momentum in its online ecosystem revenues, aided by an expanding subscriber base for Quickbooks Online. Notably, the company’s total Online Ecosystem revenues climbed 30% year on year to $770 million in fourth-quarter fiscal 2021. The QuickBooks Online Accounting revenues were up 28% year over year. The Online Services revenues, which include payroll, payments, time tracking and capital, grew 35% year over year.

Additionally, Intuit had reported outstanding fourth-quarter fiscal 2021 results, with revenues and the adjusted earnings per share rising 41% and 9%, respectively, on a year-over-year basis. The year-over-year increases in the top and bottom lines reflect healthy growth in the do-it-yourself category as well as solid revenue contribution from the Credit Karma business. Credit Karma contributed $405 million to the company’s total quarterly revenues.

Nonetheless, Intuit’s near-term prospects look gloomy as the global lockdown amid the coronavirus crisis has affected small businesses, posing risks to its revenue growth. Small businesses are pushing back their payroll-related investments due to the pandemic-induced global economic and business uncertainties.

Additionally, higher costs and expenses due to increased investments in the marketing and engineering teams are expected to continue impacting the company’s near-term bottom-line performance. Costs associated with the Credit Karma acquisition might further elevate expenses.

Zacks Rank & Stocks to Consider

Currently, Intuit carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the broader technology sector include Microsoft MSFT, STMicroelectronics N.V. STM, and NVIDIA Corporation NVDA, all carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Microsoft, STMicroelectronics, and NVIDIA is currently pegged at 11.1%, 5%, and 19.5%, respectively.

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Intuit Inc. (INTU) : Free Stock Analysis Report

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