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Intuit Continues to Face Headwinds: Should You Offload?
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It is prudent to offload certain stocks that do not have enough potential and are weighed down by tough market conditions. Identifying such stocks on a regular basis and getting rid of them is one of the keys to successful investing.
Intuit Inc. (INTU - Free Report) seems to be one such stock, which investors need to dump for now if they are looking to avoid long-term losses. The stock faces several headwinds at the moment and discarding it at the right time is vital to shielding one’s portfolio from massive losses.
Here’s Why Intuit Should be Avoided
Intuit carries a Zacks Rank #5 (Strong Sell). Going by the Zacks model, companies holding a Zacks Rank #5 are likely to underperform the broader market.
Also, analysts have become increasingly bearish on the stock over the past couple of months with estimates moving south. With all estimates moving down and no upward revision in the past 30 days, the Zacks Consensus Estimate for fiscal 2017 earnings declined from $3.55 to $3.41 per share.
Further, Intuit’s stock price history reveals that the company has disappointed for a long time. In fact, for the past six months, shares of Intuit have risen 10.7%, underperforming the Zacks Categorized Computer-Software industry, which has showcased an increase of 13.8%.
Adding to the woes the stock carries a VGM Score of “F.” We note a weak Style Score robs the stock of much of its upside potential over the next 30 days. So if a stock you’re in slips to Style Score of D or F, it’s better to sell that stock and switch to one with a score of A or B.
Our Take
Though Intuit has been focusing on cost control and strategic restructuring to focus on the QuickBooks services and offset some of the negatives, we believe these activities will not be able to achieve the full cost-savings run-rate anytime soon owing to the intensity of the short-term challenges.
Moreover, rising competition from payroll solution providers such as Paycom Software Inc. (PAYC - Free Report) and Automatic Data Processing (ADP - Free Report) is a concern, especially considering the seasonality of Intuit’s tax business and the ongoing economic uncertainty.
We expect the aforementioned factors to hurt the company’s near-term profitability. Hence, we recommend investors to stay away from Intuit shares until the Zacks Rank, VGM score and estimates improve.
Cirrus Logic has a long-term earnings per share growth rate of 17.5%.
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Intuit Continues to Face Headwinds: Should You Offload?
It is prudent to offload certain stocks that do not have enough potential and are weighed down by tough market conditions. Identifying such stocks on a regular basis and getting rid of them is one of the keys to successful investing.
Intuit Inc. (INTU - Free Report) seems to be one such stock, which investors need to dump for now if they are looking to avoid long-term losses. The stock faces several headwinds at the moment and discarding it at the right time is vital to shielding one’s portfolio from massive losses.
Here’s Why Intuit Should be Avoided
Intuit carries a Zacks Rank #5 (Strong Sell). Going by the Zacks model, companies holding a Zacks Rank #5 are likely to underperform the broader market.
Also, analysts have become increasingly bearish on the stock over the past couple of months with estimates moving south. With all estimates moving down and no upward revision in the past 30 days, the Zacks Consensus Estimate for fiscal 2017 earnings declined from $3.55 to $3.41 per share.
Further, Intuit’s stock price history reveals that the company has disappointed for a long time. In fact, for the past six months, shares of Intuit have risen 10.7%, underperforming the Zacks Categorized Computer-Software industry, which has showcased an increase of 13.8%.
Adding to the woes the stock carries a VGM Score of “F.” We note a weak Style Score robs the stock of much of its upside potential over the next 30 days. So if a stock you’re in slips to Style Score of D or F, it’s better to sell that stock and switch to one with a score of A or B.
Our Take
Though Intuit has been focusing on cost control and strategic restructuring to focus on the QuickBooks services and offset some of the negatives, we believe these activities will not be able to achieve the full cost-savings run-rate anytime soon owing to the intensity of the short-term challenges.
Moreover, rising competition from payroll solution providers such as Paycom Software Inc. (PAYC - Free Report) and Automatic Data Processing (ADP - Free Report) is a concern, especially considering the seasonality of Intuit’s tax business and the ongoing economic uncertainty.
We expect the aforementioned factors to hurt the company’s near-term profitability. Hence, we recommend investors to stay away from Intuit shares until the Zacks Rank, VGM score and estimates improve.
Stock to Consider
A better-ranked stock in the broader technology sector is Cirrus Logic Inc. (CRUS - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
Cirrus Logic has a long-term earnings per share growth rate of 17.5%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>