Company Reports

Intuit is the giant behind U.S. small-business accounting software QuickBooks and do-it-yourself U.S. tax software TurboTax. With TurboTax and QuickBooks online sales having eclipsed their respective desktop sales, Intuit has now transitioned into a cloud-first company. Consequently, this has enabled Intuit to leverage customer data to streamline the user experience across disparate products and to natively market its offerings, in turn supporting switching costs and a network effect, which we consider to already be the backbones of Intuit’s wide moat.

Wide-moat Intuit’s second-quarter results met our top-line growth expectations but exceeded our profitability expectations despite ongoing macroeconomic challenges and product innovation spending. With reiterated fiscal 2024 guidance, we’re retaining our fair value estimate of $500 and continue to view shares as overvalued, trading at a lofty 30% premium.

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.

Intuit hosted its investor day today, stressing five big bets that are informing the firm’s long-term strategic moves. Of the big bets, we think Intuit’s wagers on being the center of small-business growth and disrupting the small-business midmarket are the most compelling and promising to fuel growth ahead. Additionally, we continue to be impressed by Intuit’s ability to innovate internally as well as make smart acquisitions, which we believe are further strengthening Intuit’s already wide moat. Milestones highlighted through the day’s events (like customer retention uplift for customers using newer offerings like QuickBooks Live) keep us reassured in what we believe to be a rosy trajectory for Intuit. Intuit marked its total addressable market at $312 billion, which implies 5% penetration thus far and, unsurprisingly, Intuit reiterated fiscal 2024 guidance given last month with fourth-quarter results, leaving our financial model unchanged. As a result, we are maintaining our $500 fair value estimate, which leaves Intuit shares fairly valued.

Intuit is the giant behind U.S. small-business accounting software QuickBooks and do-it-yourself U.S. tax software TurboTax. With TurboTax and QuickBooks online sales having eclipsed their respective desktop sales, Intuit has now transitioned into a cloud-first company. Consequently, this has enabled Intuit to leverage customer data to streamline the user experience across disparate products and to natively market its offerings, in turn supporting switching costs and a network effect, which we consider to already be the backbones of Intuit’s wide moat.

Intuit closed its fiscal year nicely, with results in line with our expectations. Earnings guidance for the upcoming fiscal year was on the lighter side because of more moderate margin expansion than we expected as the firm doubles down on big bets, although we think this is a worthy cause. These big bets include areas like expanding the small business ecosystem, which we think makes sense, as we think accounting is one of the first entry points for a small business’ tech stack. We believe Intuit’s track record of worthwhile investments in innovation will pay off in the long term. Our fair value estimate for the wide-moat name is $500 per share, which leaves shares fairly valued.

Wide-moat Intuit posted a mixed quarter, coming in under management’s top line expectations, while beating their earnings guide. The culprit for weaker sales was an unusual tax season, with fewer returns filed. Intuit believes this stemmed from a normalization in tax returns, after an uptick in returns during the pandemic from those who filed for stimulus purposes only. Yet, in a vote of confidence, Intuit upped its revenue and EPS guidance for the full year. All in all, we're confident in our estimates and are maintaining our fair value estimate of $503 per share. Shares are down 6% upon results, implying an attractive discount to our fair value. As a reminder, we believe Intuit is a master at keeping competition at bay and innovating from within as well as making smart, synergistic acquisitions. While, for some, it may be concerning that Intuit expects total tax filings to fall by about 2% this fiscal year, we remind investors that Intuit is increasing their share of total returns filed and heavily increasing revenue per file. We see these both as ample counterbalances to a headwind that we believe is only a result of a temporary adjustment.

Intuit is the giant behind U.S. small-business accounting software QuickBooks and do-it-yourself U.S. tax software TurboTax. With TurboTax and QuickBooks online sales having eclipsed their respective desktop sales, Intuit has now transitioned into a cloud-first company. Consequently, this has enabled Intuit to leverage customer data to streamline the user experience across disparate products and to natively market its offerings, in turn supporting switching costs and a network effect, which we consider to already be the backbones of Intuit’s wide moat.

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.

Intuit closed its fiscal first quarter with strong beats on the top and bottom lines. However, results were sobered by a fiscal 2023 outlook that bakes in a much more vulnerable Credit Karma amid the macroeconomic backdrop. While management maintained its revenue outlook for all other segments, it now expects Credit Karma revenue to decline 13% year over year (at the midpoint), a stark contrast to former segment guidance of 13% growth (at the midpoint). As a result, we’re lowering our fair value estimate for the wide-moat name to $503 per share from $511. The shares are down about 1% after results to near $375. This still leaves Intuit in attractive 4-star territory, which we think offers a compelling opportunity for long-term investors. We consider Intuit to be a very high-quality wide-moat stock that is often overvalued in more normal economic waters, leaving entry points like these rare, in our view.

Intuit is the giant behind U.S. small-business accounting software QuickBooks and do-it-yourself U.S. tax software TurboTax. With TurboTax and QuickBooks online sales having eclipsed their respective desktop sales, Intuit has now transitioned into a cloud-first company. Consequently, this has enabled Intuit to leverage customer data to streamline the user experience across disparate products and to natively market its offerings, in turn supporting switching costs and a network effect, which we consider to already be the backbones of Intuit’s wide moat.

Intuit closed its fiscal year satisfactorily—beating FactSet consensus all around and well above Intuit’s former high-end of guidance. The strong results were broad-based other than Mailchimp underperforming against Intuit’s expectations. Nonetheless, things continue to look up for Intuit, as guidance for fiscal 2023 was strong. We’re maintaining our fair value estimate for the wide-moat name at $511 per share. Shares are approaching our fair value, as they are up nearly 6% after hours to near $475— almost fully reversing what had been share declines of 6% over the last five days amid an overall market selloff. We believe this leaves Intuit fairly valued given our Medium Uncertainty Rating. As a result, we think there are more attractively priced wide-moat stocks for investors at the moment—such as Workday shares, which we value at $229 per share.

Intuit is the giant behind U.S. small-business accounting software QuickBooks and do-it-yourself U.S. tax software TurboTax. With TurboTax and QuickBooks online sales having eclipsed their respective desktop sales, Intuit has now transitioned into a cloud-first company. Consequently, this has enabled Intuit to leverage customer data to streamline the user experience across disparate products and to natively market its offerings, in turn supporting switching costs and a network effect, which we consider to already be the backbones of Intuit’s wide moat.

Wide-moat Intuit is one of our top picks in the technology sector, as our $511 fair value estimate offers significant upside for long-term investors in this rarely discounted high-quality name. Contrary to market fears, we believe Intuit can weather a recession well; U.S. taxpayers must file taxes in good and bad times, and surviving small businesses focus more on cash flow management in recessionary periods. Intuit posted top-line growth even in 2008, and we think it is better positioned for weaker times today, since investments like Credit Karma ought to fare better in a downturn as personal finance takes priority. Our confidence in Intuit's long-term potential is unfazed, as we believe the company benefits from significant switching costs in its consumer tax and small-business accounting software. We think Intuit's longstanding market dominance in U.S. consumer tax and small-business accounting is a testament to such switching costs, and we are impressed by the company's high level of innovation and inability to rest on its laurels. We think the market now provides a compelling and rare opportunity to buy Intuit shares.

Despite Intuit being nearly 40 years old, the wide-moat company continues to innovate its core and seek relevant, synergistic greenfield opportunities, turning what would have otherwise been a maturing tax and small business accounting industry on its head. Intuit's focus and strategy helped lead to third-quarter Intuit results which exceeded our expectations on the top and bottom line, beyond the already hefty growth we factored in from a more condensed tax season. In a vote of confidence, Intuit increased its revenue and non-GAAP EPS guidance for the full year. All in all, we're confident in our maintained fair value estimate of $511 per share. Intuit remains the dominant consumer do-it-yourself tax and small business accounting software vendor, with no close competitors in sight and compelling areas of greenfield opportunity—like the personal finance sphere, which we expect to grow at a robust pace.

Intuit is the giant behind U.S. small-business accounting software QuickBooks and do-it-yourself U.S. tax software TurboTax. With TurboTax and QuickBooks online sales having eclipsed their respective desktop sales, Intuit has now transitioned into a cloud-first company. Consequently, this has enabled Intuit to leverage customer data to streamline the user experience across disparate products and to natively market its offerings, in turn supporting switching costs and a network effect, which we consider to already be the backbones of Intuit’s wide moat.

Wide-moat Intuit’s second-quarter results were in line with management’s updated lower guidance given earlier this month, which was prompted by a slower start to this tax season. The slower start appears to be the result of a greater tendency of putting off tax filing until closer to the IRS deadline, which management suggests has been trending prior to the global pandemic. If anything, we think Intuit can benefit from this trend--as increased procrastination implies more stress and willingness to pay for simple tax solutions--like Intuit's TurboTax offering. We also think that Intuit will benefit from a resource-strapped IRS. The IRS has urged taxpayers to file electronically to avoid lengthy delays in paying out tax refunds and general processing. We think this leaves Intuit's TurboTax offering even more appealing. All considered, we're confident in our maintained fair value estimate of $511 per share, which leaves Intuit stock fairly valued, in our view. While we think the market is pricing Intuit stock within our fair value range, we continue to balk at the Street's median target price of $720 per share, according to FactSet, which surpasses even our bull case fair value estimate of $713 per share due to what we believe are divergences in long-term growth rates.

Wide-moat Intuit reported preliminary second-quarter earnings ahead of its official release to come Feb. 24 to give investors a head's up on a slower start to this year's tax season. Intuit expects to report revenue at a midpoint of $2.663 billion (compared with formerly guided $2.734 billion). Despite the step down from what we were expecting, we are encouraged that Intuit reiterated its full-year 2022 guidance, implying that whatever was lost over the quarter will be made up for in the remainder of the year--as we see the tax season to its end. This gives us confidence in maintaining our $511 fair value estimate for Intuit, which leaves the stock fairly valued--and approaching our fair value estimate further--as the stock is down 3% upon the preliminary release.

Wide-moat Intuit kicked off fiscal 2022 with top and bottom line results both eclipsing our expectations. The solid financials were buoyed by strength in small business and self-employed, or SBSE, and Credit Karma segments. Management also provided strong guidance for fiscal 2022, with the firm expecting to grow its top line at a healthy clip--near 30% year over year. With a good start to the year and the expectation of continued strength, we are raising our fair value estimate for wide-moat Intuit to $511 per share from $424 per share. Shares were up 9% after hours, trading at $685 per share, leaving the stock overvalued, in our view.

Intuit is the giant behind U.S. small-business accounting software QuickBooks and do-it-yourself U.S. tax software TurboTax. With TurboTax and QuickBooks online sales having eclipsed their respective desktop sales, Intuit has now transitioned into a cloud-first company. Consequently, this has enabled Intuit to leverage customer data to streamline the user experience across disparate products and to natively market its offerings, in turn supporting switching costs and a network effect, which we consider to already be the backbones of Intuit’s wide moat.