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Why Is Intuit (INTU) Up 3.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Intuit (INTU - Free Report) . Shares have added about 3.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Intuit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Intuit Reports Solid Q4 Results
Intuit reported impressive fourth-quarter fiscal 2018 results. Its non-GAAP earnings came in at 32 cents per share, surpassing the Zacks Consensus Estimate of 23 cents. The figure also surged 60% on a year-over-year basis.
This tax-preparation related software maker reported revenues of $988 million, up 17.3% from the year-ago quarter. The top line was better than the guided range of $940-$960 million and also outpaced the Zacks Consensus Estimate of $953 million.
Revenues for full-fiscal 2018 gained from 18% growth in the Small Business and Self-Employed Group and 14% rise in the Consumer Group. The company also witnessed solid growth in the subscriber base of QuickBooks Online.
Another catalyst was constant product innovations in the Consumer business.
Quarter in Detail
Services and Other revenues were up nearly 25.9% to $666 million while product revenues increased 2.9% to $322 million.
Segment-wise, Small Business and Self-Employed Group witnessed 20% year-over-year growth in the quarter at $805 million. The improvement was primarily driven by 43.2% subscriber growth for Quickbooks Online, which brought the count to 3.4 million at the end of the reported quarter. Online ecosystem revenues surged 43.3%. Self-Employed subscribers increased to around 720,000 from 390,000.
Geographically, the U.S. based subscribers of QuickBooks Online grew 38% to 2.6 million and international subscribers increased 62% on a year-over-year basis to more than 800,000.
Desktop ecosystem revenues grew 7%, while desktop units declined 7% in the quarter.
Notably, for the fiscal fourth quarter, revenues from Consumer Group were up 17% year over year while that from Strategic Partners Group jumped 3%.
Intuit’s continued focus on multiservice accounting firms led to its account success with higher- than-expected professional tax revenues and growth in the small business ecosystem simultaneously. One Intuit Ecosystem business also gained significant momentum in fiscal 2018.
TurboTax Live offering witnessed growth and is likely to be accretive to the company’s Consumer business, going ahead.
The company posted non-GAAP operating income of $104 million compared with $78 million in the year-ago quarter. Operating margin increased 200 basis points to 11% during the quarter.
Balance Sheet and Cash Flow
Intuit exited fiscal fourth quarter with cash and cash equivalents of $1.464 billion compared with $1.936 billion in the prior quarter. Long-term debt was $388 million compared with $400 million reported in the previous quarter.
Cash provided by operational activities during fiscal 2018 was $2.112 billion. In the fiscal, the company repurchased more than $270 million worth of shares. The board of directors approved an additional $2 billion repurchase authorization, giving Intuit a total authorization of $3.2 billion to repurchase shares, including the remaining amount on prior authorization.
The company received an authorization to pay a dividend of 47 cents per share on Oct 18, 2018.
Outlook
Intuit is set to adopt new revenue recognition standards, ASC 606 beginning the first quarter of fiscal 2019.
Under ASC 606, the company expects fiscal first-quarter revenues within $955-$975 million. Non-GAAP operating income is projected in the range of $30-$40 million. The company anticipates non-GAAP earnings in the band of 9-11 cents per share.
The company anticipates desktop ecosystem revenue to decline single digits in the fiscal first quarter. This is because of shift in QuickBooks enterprise subscription offering from a perpetual to a term license.
The company also announced its guidance for fiscal 2019. Intuit expects revenues of $6.53-$6.63 billion, representing an increase of 8-10% year over year. Non-GAAP earnings per share are projected between $6.4 and $6.5.
In the fiscal 2019, Intuit expects Small Business and Self-Employed Group to grow at 9-11%, Consumer Group at 9-10 %, and Strategic Partner Group at 2-4 %.
The company also expects QuickBooks’ desktop unit to decline 1-9% and desktop ecosystem revenue to be flat in fiscal 2019.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -35.17% due to these changes.
VGM Scores
Currently, Intuit has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Intuit has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Intuit (INTU) Up 3.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Intuit (INTU - Free Report) . Shares have added about 3.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Intuit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Intuit Reports Solid Q4 Results
Intuit reported impressive fourth-quarter fiscal 2018 results. Its non-GAAP earnings came in at 32 cents per share, surpassing the Zacks Consensus Estimate of 23 cents. The figure also surged 60% on a year-over-year basis.
This tax-preparation related software maker reported revenues of $988 million, up 17.3% from the year-ago quarter. The top line was better than the guided range of $940-$960 million and also outpaced the Zacks Consensus Estimate of $953 million.
Revenues for full-fiscal 2018 gained from 18% growth in the Small Business and Self-Employed Group and 14% rise in the Consumer Group. The company also witnessed solid growth in the subscriber base of QuickBooks Online.
Another catalyst was constant product innovations in the Consumer business.
Quarter in Detail
Services and Other revenues were up nearly 25.9% to $666 million while product revenues increased 2.9% to $322 million.
Segment-wise, Small Business and Self-Employed Group witnessed 20% year-over-year growth in the quarter at $805 million. The improvement was primarily driven by 43.2% subscriber growth for Quickbooks Online, which brought the count to 3.4 million at the end of the reported quarter. Online ecosystem revenues surged 43.3%. Self-Employed subscribers increased to around 720,000 from 390,000.
Geographically, the U.S. based subscribers of QuickBooks Online grew 38% to 2.6 million and international subscribers increased 62% on a year-over-year basis to more than 800,000.
Desktop ecosystem revenues grew 7%, while desktop units declined 7% in the quarter.
Notably, for the fiscal fourth quarter, revenues from Consumer Group were up 17% year over year while that from Strategic Partners Group jumped 3%.
Intuit’s continued focus on multiservice accounting firms led to its account success with higher- than-expected professional tax revenues and growth in the small business ecosystem simultaneously. One Intuit Ecosystem business also gained significant momentum in fiscal 2018.
TurboTax Live offering witnessed growth and is likely to be accretive to the company’s Consumer business, going ahead.
The company posted non-GAAP operating income of $104 million compared with $78 million in the year-ago quarter. Operating margin increased 200 basis points to 11% during the quarter.
Balance Sheet and Cash Flow
Intuit exited fiscal fourth quarter with cash and cash equivalents of $1.464 billion compared with $1.936 billion in the prior quarter. Long-term debt was $388 million compared with $400 million reported in the previous quarter.
Cash provided by operational activities during fiscal 2018 was $2.112 billion. In the fiscal, the company repurchased more than $270 million worth of shares. The board of directors approved an additional $2 billion repurchase authorization, giving Intuit a total authorization of $3.2 billion to repurchase shares, including the remaining amount on prior authorization.
The company received an authorization to pay a dividend of 47 cents per share on Oct 18, 2018.
Outlook
Intuit is set to adopt new revenue recognition standards, ASC 606 beginning the first quarter of fiscal 2019.
Under ASC 606, the company expects fiscal first-quarter revenues within $955-$975 million. Non-GAAP operating income is projected in the range of $30-$40 million. The company anticipates non-GAAP earnings in the band of 9-11 cents per share.
The company anticipates desktop ecosystem revenue to decline single digits in the fiscal first quarter. This is because of shift in QuickBooks enterprise subscription offering from a perpetual to a term license.
The company also announced its guidance for fiscal 2019. Intuit expects revenues of $6.53-$6.63 billion, representing an increase of 8-10% year over year. Non-GAAP earnings per share are projected between $6.4 and $6.5.
In the fiscal 2019, Intuit expects Small Business and Self-Employed Group to grow at 9-11%, Consumer Group at 9-10 %, and Strategic Partner Group at 2-4 %.
The company also expects QuickBooks’ desktop unit to decline 1-9% and desktop ecosystem revenue to be flat in fiscal 2019.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -35.17% due to these changes.
VGM Scores
Currently, Intuit has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Intuit has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.