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Intuit Inc. (INTU), headquartered in Mountain View, California, provides financial management, compliance, and marketing products and services. With a market cap of $179.3 billion, the company provides business management and payroll processing, personal finance, and tax preparation and filing software solutions.
Shares of this software giant have underperformed the broader market over the past year. INTU has gained 12.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.3%. In 2024, INTU’s stock rose 1.5%, compared to the SPX’s 25.5% rise on a YTD basis.
Narrowing the focus, INTU’s underperformance is apparent compared to the iShares Expanded Tech-Software Sector ETF (IGV). The exchange-traded fund has gained about 39% over the past year. Moreover, the ETF’s 30.4% gains on a YTD basis outshine the stock’s single-digit returns over the same time frame.
Intuit's stock has faced challenges as reports suggest that the Trump administration plans to develop a mobile app for federal income tax filing, competing directly with Intuit's tax filing app. Additionally, there have been promotional changes in retail channels impacting its desktop offerings.
On Nov. 21, INTU shares closed up more than 4% after reporting its Q1 results. Its adjusted EPS of $2.50 surpassed Wall Street expectations of $2.36. The company’s revenue was $3.3 billion, topping Wall Street forecasts of $3.1 billion. INTU expects full-year adjusted EPS to be between $19.16 and $19.36, and expects revenue to be $18.2 billion to $18.3 billion.
For the current fiscal year, ending in July 2025, analysts expect INTU’s EPS to grow 21% to $14.05 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 28 analysts covering INTU stock, the consensus is a “Strong Buy.” That’s based on 21 “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
The configuration has been fairly stable over the past three months.
On Nov. 22, Oppenheimer kept an “Outperform” rating and raised the price target on INTU to $722, implying a potential upside of 13.8% from current levels.
The mean price target of $730.24 represents a 15.1% premium to INTU’s current price levels. The Street-high price target of $800 suggests an ambitious upside potential of 26.1%.
