Good Results and a Fair Value Increase for Intuit

After adjusting our model to account for management’s updated outlook and implementing a significant income tax adjustment from fiscal 2018 onwards, we are raising our fair value estimate to $114 from $98 and maintaining our wide economic moat rating. Nevertheless, we believe the stock is currently overvalued and would not commit new capital to the name.

For the quarter, revenue rose 10% year over year to $2.54 billion. Small Business Online Ecosystem’s 30% revenue growth supported good growth for the Small Business group, which also included solid performances from Online Payroll and Payments. We think Intuit’s online strategy remains a strong long-term growth driver and will help as it pushes to become the operating system behind small businesses.

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