Intuit Reports Strong Q2 Results Amid Ongoing Stock Volatility

Intuit Inc. (NASDAQ:INTU) recently delivered its Q2 fiscal 2025 results, which ended in July, surpassing analysts’ expectations for both revenue and earnings. The company reported revenue of $3.96 billion and adjusted earnings per share of $3.32, compared to consensus estimates of $3.83 billion and $2.58, respectively. Strong demand for Intuit’s AI-driven tools played a significant role in this robust performance. Following the announcement, INTU Stock saw a notable increase.

Despite this positive growth, INTU Stock has experienced a 10% decline since the onset of 2024, underperforming the S&P 500, which increased by 28%. This underperformance correlates with the company’s cautious guidance from the previous quarter. Investors seeking more consistent gains may consider the High-Quality portfolio, which has recorded over 91% returns since its inception and consistently outperforms the S&P.

Image by Steve Buissinne from Pixabay

Q2 Performance Highlights

Intuit’s revenue of $4.0 billion in Q2 represented a 17% year-over-year increase. Performance across different segments varied: the Global Business Solutions Group exhibited impressive growth, rising 21% to $2.9 billion, while Credit Karma’s revenue surged 36% to $511 million. In contrast, Consumer Group sales increased by only 3% to $509 million, and ProTax Group revenue dipped by 1% to $272 million.

Overall, the company benefited from enhanced pricing strategies and a growth in customer numbers. Intuit’s adjusted operating margin grew by 370 basis points year-over-year, reaching 31.8% in Q2. The improved revenue and margins resulted in adjusted earnings per share of $3.32, up from $2.50 in the same quarter last year. Looking forward, Intuit has reaffirmed its full-year outlook, projecting revenue between $18.16 billion and $18.35 billion, alongside adjusted earnings per share ranging from $19.16 to $19.36.

Market Reaction and Stock Volatility

INTU Stock saw an 8% surge in pre-market trading following the earnings announcement. Nonetheless, it has shown considerable volatility over the years. The stock’s annual returns fluctuated significantly: 70% in 2021, -39% in 2022, 62% in 2023, and a mere 1% in 2024.

In contrast, the Trefis High Quality (HQ) Portfolio, which consists of 30 stocks, has demonstrated lower volatility and stronger performance. The HQ Portfolio has comfortably outperformed the S&P 500 over the last four years. This can be attributed to the combination of higher returns with reduced risk, as reflected in its performance metrics.

Future Outlook for Intuit

Given the current unpredictable macroeconomic climate surrounding rate cuts and trade tensions, there is an ongoing question about whether INTU might replicate its past underperformance relative to the S&P 500, as seen in 2022 and 2024. Alternatively, could the stock experience a significant rebound? From a valuation standpoint, INTU Stock appears to have ample growth potential.

Currently trading at approximately $600 in pre-market, INTU Stock has a price-to-sales ratio of 10.3x, slightly below its five-year average of 10.7x. Given the company’s positive Q2 results, impressive sales growth, and margin expansion, a higher valuation multiple than its historical average seems warranted. Therefore, despite recent price movements, we believe there is further growth potential for INTU Stock.

Although INTU Stock shows room for growth, it’s beneficial to compare its performance metrics with those of its peers. Valuable insights can be found in the Peer Comparisons.

Returns	Feb 2025 MTD [1]	Since start of 2024 [1]	2017-25 Total [2]
INTU Return	-8%	-10%	417%
S&P 500 Return	1%	28%	173%
Trefis Reinforced Value Portfolio	-7%	15%	677%

[1] Returns as of 2/26/2025
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.