Shares of Intuit INTU have returned approximately 15.8% year to date, outperforming the industry’s rise of 5%. Meanwhile, the same came in against the S&P 500 Composite’s decline of 12%.
The company boasts an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four reported quarters, the average being 52.2%.
Robust increase in online ecosystem revenues is the key growth driver for the company. With an expected long-term earnings per share growth rate of 16.3% and a market cap of $47.4 billion, the stock seems to be a bet to reckon with for investors. The latter needs to retain it in the portfolio if looking to reap long-term gains.
Year-to-Date Price Performance
Let’s delve deeper and analyze the stock’s prospects.
Intuit has two main products, namely QuickBooks and TurboTax. The former offers financial and business management online services and desktop software to small businesses while the latter provides income-tax preparation products and services. Notably, Intuit has been witnessing solid year-over-year growth for the past several quarters in its QuickBooks subscriber base, driving Small Business segment revenues in turn.
Notably, about 29 million small businesses in the United States depend on third-party companies to deal with respective financial and accounting related preparation. Banking on its rich product portfolio, Intuit has capitalized well on this opportunity, which is clearly reflected in its results.
Moreover, the company with its QuickBooks Online Advanced solution is now targeting the midmarket. Notably, the solution is receiving a positive feedback from customers and expects it to gain more adoption with better functionalities moving ahead.
A solid momentum of the company’s lending product, QuickBooks Capital, and the addition of same-day payroll capability within QuickBooks Online Payroll are positives for the company.
Intuit’s focus on becoming a FinTech platform is likely to accelerate growth going forward. We note that the redesign of QuickBooks Payments to make the discovery of critical payments functionality easier for customers is proving beneficial to Intuit. Besides, management is optimistic about the upcoming launch of next-day funding within QuickBooks Payments.
Furthermore, growth in TurboTax Live platform is likely to be accretive to the company’s Consumer business, going ahead. The company announced that it is building innovative solutions to better serve customers in the upcoming tax season. Moreover, its focus on expanding do-it-yourself (DIY) tax segment and the assisted tax category with TurboTax Live is encouraging. Also, the company expects tax reform to be a key driving catalyst for its DIY category.
Intuit Inc. Revenue (TTM)
Intuit Inc. Revenue (TTM) | Intuit Inc. Quote
Zacks Rank & Stocks to Consider
Intuit currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Computer and Technology sector are Twitter TWTR, eGain EGAN and Symantec Corporation SYMC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Twitter, eGain and Symantec is projected at 22%, 30% and 7.9%, respectively.
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