A month has gone by since the last earnings report for Intuit (INTU). Shares have added about 8.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Intuit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Intuit Q3 Earnings Beat Estimates
Intuit reported third-quarter fiscal 2021 non-GAAP earnings of $6.07 per share, which beat the Zacks Consensus Estimate of $6.04. Moreover, the bottom-line figure surged 35% from the year-ago quarter.
In addition, revenues of $4.17 billion came in line with the consensus mark but climbed 39% year on year.
The year-over-year surges in the top and bottom lines reflect the strong growth in the do-it-yourself category. Solid contribution from TurboTax Live was a positive. Moreover, solid customer growth was also a top-line tailwind.
Quarter in Detail
Segment-wise, Small Business and Self-Employed Group revenues grew 20% year over year to $1.2 billion. This rise was primarily driven by solid growth in customers for QuickBooks Online and a favorable mix-shift. Moreover, approximately $10 million of non-recurring revenues from the Paycheck Protection Program boosted this segment.
Total Online Ecosystem revenues climbed 28% year on year to $715 million. QuickBooks Online Accounting revenues were up 24% year over year. Online Services revenues, which include payroll, payments, time tracking and capital, grew 34% year over year.
Within QuickBooks Online payroll, a mix-shift to Intuit’s full-service offering was a tailwind. Also, within QuickBooks Online payments, continued uptick in the customer base drove revenues.
Total international online revenues increased 38% year over year on a constant-currency basis.
Total Desktop ecosystem revenues grew 9% year on year in the reported quarter.
In the fiscal third quarter, revenues from Consumer Group jumped 34% year on year to $2.4 billion.
Intuit’s non-GAAP operating income increased 43% to $2.2 billion.
Balance Sheet and Cash Flow
As of Apr 30, 2021, Intuit’s cash and investments were $4.1 billion compared with $2.7 billion as of Jan 31.
The company repurchased stocks worth $380 million during the reported quarter. Intuit has $1.8 billion remaining under its authorization.
Additionally, the company announced that its board of directors has approved a quarterly cash dividend of 59 cents per share to be payable on Jul 19, 2021. The newly-approved cash dividend represents a year-over-year increase of 11%.
For the fiscal fourth quarter, Intuit expects revenues between 26% and 28% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of $1.55-$1.60 per share.
The company raised the outlook for fiscal 2021. It now projects revenues in a band of $9.36-$9.40 billion, up from the previous guided band of $8.810-$8.995 billion, calling for year-over-year growth of 22%, up from the previous guidance of 15-17% growth. Fiscal 2021 adjusted earnings are projected between $9.32 and $9.37 per share, higher than the previous guidance of $8.20-$8.40.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 1167.23% due to these changes.
Currently, Intuit has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Intuit has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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