Intuit Inc. INTU is riding on the solid traction of its tax preparation platform, TurboTax, which is also strengthening the company’s Consumer business. The number of individuals preferring to file their income tax themselves is increasing rapidly, thereby boosting scope for Intuit’s TurboTax software.
Notably, Intuitis has been taking commendable initiatives to ease the process of acquiring stimulus money for lower-income Americans. The company recently partnered with Internal Revenue Service (IRS) to announce a free Stimulus Registration product via TurboTax, through which citizens with no tax liabilities can apply for stimulus money.
Citing estimates of IRS, Intuit noted that 80% of Americans, around 10 million of whom are tax-exempt, are eligible to receive a stimulus payment this year. However, the IRS refers only to the federal tax return to send stimulus checks as per eligibility of individuals. This leads to many Americans being unaware of their eligibilities, and thus, being deprived of the stimulus payment.
Intuit Inc. Price and Consensus
Intuit Inc. price-consensus-chart | Intuit Inc. Quote
TurboTax on a Roll
Intuit has two main products, namely QuickBooks and TurboTax. While the former offers financial and business management online services and desktop software to small businesses, the latter provides income-tax preparation products and services.
Notably, growing demand for financial software to prepare taxes is a key driver for the company. Reportedly, the company generates nearly 30% of its total revenues from do-it-yourself (DIY) consumer software like TurboTax.
Citing data compiled by theIRS, eFile.com stated that the total number of self-prepared returns filed for the 2018 tax year was up 4.4% year over year as of December 2019.
Nevertheless, with customers looking for less expensive options, competition from H&R Block HRB, Blucora’s BCOR TaxAct and other professional tax preparation companies is a persistent concern.
In February, Blucora’sTaxAct announced free access for customers to a proprietary tax-analyzer — My Tax Plan — that gives tips to collect bigger refunds, while adding to their retirement savings.
Moreover, H&R Block is encouraging its clients to use the virtual Tax Pro GoSM service and DIY offerings, including live help through Online Assist, to ease complexities related to tax return filing, in the wake of the coronavirus pandemic-led lockdown.
Nonetheless, Intuit’s focus on expanding its DIY tax segment as well as the assisted tax category with TurboTax Live is encouraging.
Zacks Rank and A Key Pick
Intuit currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology sector is Advanced Semiconductor Engineering, Inc. ASX, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Advanced Semiconductor is currently pegged at 3.03%.
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