Intuit (NASDAQ:INTU), maker of some of the most widely-used tax and accounting software around, recently offered some remarks going into its earnings season. The company is poised to announce earnings on May 25 via a conference, and when it does, the company expects things to go well. The news alone was enough to lift Intuit stock to nearly $399 at one point in trading this morning. Though it's given back some of those gains, a bullish outlook from financial analysts is helping to keep the company looking toward its 52-week high.
A Positive Look at the Upcoming Earnings Report
Intuit noted that it expects to not only meet, but also exceed the high-end range of several metrics. The company not only looks to exceed guidance on its full-year total revenue, but also on its operating income (both GAAP and non-GAAP), and its earnings per share guidance as presented on February 23.
However, Intuit also noted that its third fiscal quarter earnings will be lower than expected. This is due to the recent pandemic-induced shift in due dates for 2020 tax filings, which the IRS pushed back from the customary April 15 date to the new date of May 17. This pulls some purchases of Intuit software—including brands like TurboTax and QuickBooks—forward out of the quarter.
Intuit also offered some notes on segment trends. For the small business / self-employed group, trends in new customer acquisition, customer retention, and total companies running Intuit payroll are all above levels seen before the pandemic hit. Intuit also noted “strong momentum” in its Credit Karma software, and revenue for the software hit an all-time record high both in the quarter and for the month of March specifically. The company's consumer group, including TurboTax and TurboTax Live, looks solid as well, with TurboTax Live customer growth up over 70%, and TurboTax returns to be up on a year-to-year comparative basis.
Currently, the company expects to report revenue between $4.165 and $4.17 billion. This is down from earlier guidance of $4.605 billion to $4.655 billion, again largely owing to the shift in due dates for taxes from the IRS. The company looks for diluted earnings per share figures between $5.20 and $5.25, down from previous guidance of between $5.85 and $5.95, and non-GAAP operating income to come in between $2.195 billion and $2.2 billion, down from earlier projections of $2.475 billion to $2.515 billion.
What Do Financial Analysts Think About INTU Stock?
Financial analysts have been behind Intuit stock for some time now, as demonstrated by the consensus “buy” rating that's been in place for over two years now. A look at the overall pattern, meanwhile, suggests that the Intuit stock forecast is looking increasingly more bullish as the months go by.
A year ago, the company had 15 “buy” ratings, two “hold” and one “sell” rating to its credit. That ratio held true going into six months ago, and three months ago, it picked up one more “hold” rating. In April, though, the “sell” rating fell away, and the company added a “buy” rating. Today, it's added one more “buy” to put us at 17 “buy” and three “hold”.
The average price target, meanwhile, stands at $435.68, with a high of $500 and a low of $383. Recent movement in price targets has been positive, as Royal Bank of Canada earlier today adjusted its target upward, going from $480 to $490. Other recent moves in the field have been positive as well; Wolfe Research initiated coverage on Intuit with a rating of “outperform” and a price target of $475 in late April, while Bank of America reiterated its “buy” rating in mid-April with a price target of $460. Given that Intuit stock is currently trading at $397.40 as of this writing, and its 52-week high is $423.74, it's clear financial analysts are looking for even greater advances to come.
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