Intuit Earnings: New Tactics Boost Tax Filings and Ecosystem Strength Persists; Shares Overvalued

Intuit reported a solid beat on the top and bottom line in its first quarter of the year as TurboTax filings had higher volumes than expected in the tax extension period and small business platform solutions continued to make headway on Intuit’s path to higher attach rates in its small business software ecosystem. Despite the ideal quarter, full-year guidance was unchanged as some of the upside was a result of experimental tactics Intuit had in place that the firm hopes will continue in increased sales effectiveness, but could prove unrepeatable. Altogether, the upside from the quarter was based on Intuit’s strategic moves, which we continue to be impressed by, as opposed to macroeconomic tailwinds. As a result, while we do see the potential for further beats this year, we are reiterating our $500 fair value estimate for the wide-moat stock until we see Intuit’s new strategies more tested. All in all, we continue to view shares as overvalued.