Intuit Inc. Struggles to Keep Up in a Booming Market
Intuit Inc. (INTU), based in Mountain View, California, offers products and services related to financial management, compliance, and marketing. With a market capitalization of $179.3 billion, the company specializes in business management, payroll processing, and tax preparation software.
Slow Growth Compared to Major Indices
Over the past year, shares of Intuit have not performed as well as the broader market. INTU has seen a gain of 12.5%, while the S&P 500 Index ($SPX) has surged by approximately 31.3%. Year-to-date in 2024, the stock climbed just 1.5%, significantly trailing the SPX’s impressive rise of 25.5%.
Competition from Emerging Technologies
When examining the iShares Expanded Tech-Software Sector ETF (IGV), the gap in performance becomes even clearer. This ETF has gained roughly 39% in the last year, and its year-to-date growth of 30.4% starkly contrasts with INTU’s modest single-digit returns.
Challenges for Intuit have included potential competition from a mobile app for federal tax filing, reportedly in development by the Trump administration, which poses a direct threat to Intuit’s tax filing products. Additionally, changes in retail marketing strategies have affected their desktop software offerings.
Promising Earnings Report Offers Glimmer of Hope
On November 21, INTU shares rose over 4% following the announcement of its Q1 earnings. The adjusted earnings per share (EPS) reached $2.50, exceeding the Wall Street expectation of $2.36. The company’s revenue hit $3.3 billion, surpassing forecasts of $3.1 billion. For the fiscal year, INTU anticipates an adjusted EPS in the range of $19.16 to $19.36 and revenue between $18.2 billion and $18.3 billion.
Analysts Remain Optimistic About Future Growth
Looking ahead to the fiscal year ending in July 2025, analysts predict that INTU’s EPS will grow 21% to reach $14.05 on a diluted basis. The company has a strong track record, beating consensus estimates in each of the last four quarters. Among the 28 analysts covering INTU stock, the consensus rating is a ‘Strong Buy,’ supported by 21 ‘Strong Buy’ ratings, one ‘Moderate Buy,’ and six ‘Holds.’
This analyst sentiment has remained stable over recent months. On November 22, Oppenheimer maintained an ‘Outperform’ rating and raised the price target on INTU to $722, indicating a potential upside of 13.8% from current prices. The average price target stands at $730.24, reflecting a 15.1% premium, while the highest target of $800 suggests a notable upside of 26.1%.
On the date of publication, Neha Panjwani did not hold any positions in the securities mentioned. All information provided is for educational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein belong to the author and do not necessarily reflect those of Nasdaq, Inc.
