Wide-Moat Intuit Shares Are Cheap Despite Bad Karma in the Near Term; Maintain $503 FVE

Wide-moat Intuit’s second-quarter results beat our expectations all around, as its core business held up well despite Credit Karma macro-related weakness. With reiterated fiscal 2023 guidance, we're retaining our fair value estimate of $503, which leaves Intuit stock significantly undervalued, in our view. We believe that the market is not fully baking in the long-term potential of Intuit expanding its software ecosystem for small business owners and year-round personal finance offerings. We continue to be impressed with Intuit’s level of internal innovation and ability to make smart, synergistic acquisitions. In the short term, we trust that the outlook for the year is derisked, as a result of levers the firm has to pull—such as cutting back on marketing expenses. As a result, we think that upside for the year isn’t out of the picture.