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Intuit (INTU) Set to Report Q2 Earnings: What's in Store?

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Intuit Inc. INTU is slated to release second-quarter fiscal 2022 results on Feb 24.

For the fiscal second quarter, Intuit projects revenues between $2.66 billion and $2.665 billion, suggesting a year-over-year increase of 68-69%. The Zacks Consensus Estimate for revenues is pegged at $2.72 billion, indicating year-over-year growth of 72.4%.

On a non-GAAP basis, Intuit anticipates reporting earnings per share in the range of $1.84-$1.88. The consensus mark for earnings is pegged at $1.83 per share, suggesting a whopping year-over-year improvement of 169%.

Intuit’s earnings beat estimates in each of the trailing four quarters, the average surprise being 20.9%.

Let’s see how things have shaped up before the upcoming announcement.

Intuit Inc. Price and EPS Surprise

Intuit Inc. Price and EPS Surprise
Intuit Inc. Price and EPS Surprise

Intuit Inc. price-eps-surprise | Intuit Inc. Quote

Factors to Consider

Intuit’s second-quarter revenues are likely to have been driven by the solid growth in the Online Ecosystem, aided by an expanding subscriber base for Quickbooks Online. The Zacks Consensus Estimate for total Online Ecosystem revenues is pegged at $1.07 billion for the quarter under review, indicating a 66% increase from the prior-year quarter’s reported figure. The consensus mark for Quickbooks Online revenues stands at $574 million, suggesting a 42% improvement year over year.

The gradual recovery in the Small Business and Self-Employed segment is likely to have been a tailwind for the top line during the quarter under review. The Zacks Consensus Estimate for Small Business revenues in the quarter stands at $1.52 billion, which indicates a 41% year-over-year increase.

Furthermore, the growth in the TurboTax Live offering is likely to have been accretive to the Consumer tax business during the fiscal second quarter, driven by growing customer engagement. The Zacks Consensus Estimate for revenues of $560 million from the Consumer tax business calls for growth of 281% year over year.

Additionally, revenues from the Credit Karma business (acquired in December 2020) are likely to have boosted overall sales during the second quarter. The Zacks Consensus Estimate for Credit Karma revenues stands at $410 million. The business unit contributed $418 million to INTU’s first-quarter fiscal 2022 total revenues.

The solid momentum of the company’s leading product, QuickBooks Capital, is expected to have been an upside along with improving customer retention rates during the fiscal second quarter.

However, a slower forming tax season is anticipated to have hurt the sales growth. Earlier this month, Intuit lowered its second-quarter revenue guidance to the $2.660-$2.665 billion range from the prior range of $2.719-$2.749 billion, citing the slower forming tax season.

Moreover, higher costs and expenses due to increased investments in marketing and engineering teams are expected to have negatively impacted Intuit’s second-quarter bottom line.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for INTU this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.

Though Intuit currently carries a Zacks Rank of 2, it has an Earnings ESP of -5.65%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, Zscaler ZS, NetApp NTAP and Hewlett Packard Enterprise HPE have the right combination of elements to post an earnings beat in their upcoming releases.

Zscaler carries a Zacks Rank #2 and has an Earnings ESP of +3.60%. The company is scheduled to report second-quarter fiscal 2022 results on Feb 24. Zscaler’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 52.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ZS’ second-quarter earnings is pegged at 11 cents per share, indicating year-over-year growth of 10%. The consensus mark for revenues stands at $242 million, suggesting a year-over-year increase of 54.1%.

NetApp is slated to report third-quarter fiscal 2022 results on Feb 23. The company carries a Zacks Rank #2 and has an Earnings ESP of +0.39% at present. NetApp’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 9.8%.

The Zacks Consensus Estimate for NTAP’s quarterly earnings is pegged at $1.28 per share, suggesting a year-over-year improvement of 16.4%. NetApp’s quarterly revenues are estimated to increase 9.7% year over year to $1.61 billion.

Hewlett Packard Enterprise currently carries a Zacks Rank #3 and has an Earnings ESP of +1.09%. The company is slated to report its first-quarter fiscal 2022 results on Mar 1. Hewlett Packard Enterprise’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 14.4%.

The Zacks Consensus Estimate for Hewlett Packard Enterprise’s first-quarter earnings stands at 46 cents per share, implying a year-over-year decrease of 11.4%. HPE is estimated to report revenues of $7.02 billion, which suggests growth of 2.7% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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NetApp, Inc. (NTAP) : Free Stock Analysis Report

Intuit Inc. (INTU) : Free Stock Analysis Report

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