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Why Is Intuit (INTU) Up 5.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Intuit (INTU - Free Report) . Shares have added about 5.2% 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 Q1 Earnings & Revenues Top Estimates, Increase Y/Y
Intuit reported first-quarter fiscal 2021 non-GAAP earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 38 cents. Moreover, the bottom-line figure soared 129% from the year-ago quarter’s adjusted earnings of 41 cents per share.
In addition, revenues of $1.32 billion outpaced the consensus mark of $1.20 billion as well as increased 14% year over year.
Quarter in Detail
Segment wise, Small Business and Self-Employed Group revenues jumped 13% year over year to $1.18 billion. This rise was primarily driven by solid growth in customers for QuickBooks Online and favorable mix-shift.
Total Online Ecosystem revenues climbed 28% year on year to $621 million. QuickBooks Online Accounting revenues were up 28% year over year to $392 million. Online Services revenues, which includes payroll, payments, time tracking and capital, grew 17% year over year to $229 million.
Within QuickBooks Online payroll, a mix-shift to Intuit’s full-service offering, was a tailwind. Also, within QuickBooks Online payments, continued uptick in customer base and an increase in charge volume per customer drove revenues.
Total Desktop ecosystem revenues climbed 3% year on year to $560 million in the reported quarter, reflecting benefits of additional revenues from license updates and price increases. Within Desktop ecosystem, revenues from QuickBooks Desktop Enterprise grew at mid-single-digit pace.
In the fiscal first quarter, revenues from Consumer Group were up 19% year over year to $119 million, highlighting benefits of expansion in the DIY strategy and focus on transforming assisted segment with TurboTax Live.
Meanwhile, Strategic Partner Group backed by professional tax, generated revenues of $23 million, up 21% year over year.
Management is optimistic on growing the clout of TurboTax Live and QuickBooks Live, which is expected to aid the company acquire new customers, with enhanced engagement and drive average revenue per customer or ARPC. This is likely to be accretive to the company’s Consumer business in the days ahead.
Intuit also continued to fortify the application of AI to create tools to automate repetitive tasks, increase efficiency and improve customer experience.
Intuit’s non-GAAP operating income increased to $334 million from the $129 million reported in the year-ago quarter. Non-GAAP operating margin more than doubled to 25.3% from the 11.1% witnessed in first-quarter fiscal 2020.
Balance Sheet and Cash Flow
As of Oct 31, 2020, Intuit’s cash and cash equivalents were $5.8 billion compared with $6.44 billion as of Jul 31, 2020. The company intends to use $3.6 billion of cash and cash equivalents for paying consideration for the Credit Karma acquisition.
Notably, this February, Intuit agreed to buy Credit Karma for a total consideration of $7.1 billion. In June, the company issued $2 billion in senior notes to fund a portion of the acquisition and for other general corporate purposes.
The company did not repurchase any stock during the reported quarter. Intuit has $2.4 billion remaining on its authorization.
Additionally, Intuit announced that its board of directors has approved a quarterly cash dividend of 59 cents per share to be payable on Jan 19, 2021. The newly-approved cash dividend represents a year-over-year increase of 11%.
Outlook
For the fiscal second quarter, Intuit expects revenues to increase between 8% and 9% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of $1.31-$1.34 per share.
For fiscal 2021, it projects revenues in the band of $8.265-$8.415 billion, calling for year-over-year growth between 8% and 10%. Segment wise, Small Business and Self-Employed Group sales are anticipated to grow in the range of 8-10%, Consumer Group in the 9-10% band, and ProConnect Group between flat to increase of 1%.
The fiscal 2021 adjusted earnings are projected between $8.40 per share and $8.55 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted -26.94% due to these changes.
VGM Scores
Currently, Intuit has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Intuit has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Intuit (INTU) Up 5.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Intuit (INTU - Free Report) . Shares have added about 5.2% 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 Q1 Earnings & Revenues Top Estimates, Increase Y/Y
Intuit reported first-quarter fiscal 2021 non-GAAP earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 38 cents. Moreover, the bottom-line figure soared 129% from the year-ago quarter’s adjusted earnings of 41 cents per share.
In addition, revenues of $1.32 billion outpaced the consensus mark of $1.20 billion as well as increased 14% year over year.
Quarter in Detail
Segment wise, Small Business and Self-Employed Group revenues jumped 13% year over year to $1.18 billion. This rise was primarily driven by solid growth in customers for QuickBooks Online and favorable mix-shift.
Total Online Ecosystem revenues climbed 28% year on year to $621 million. QuickBooks Online Accounting revenues were up 28% year over year to $392 million. Online Services revenues, which includes payroll, payments, time tracking and capital, grew 17% year over year to $229 million.
Within QuickBooks Online payroll, a mix-shift to Intuit’s full-service offering, was a tailwind. Also, within QuickBooks Online payments, continued uptick in customer base and an increase in charge volume per customer drove revenues.
Total Desktop ecosystem revenues climbed 3% year on year to $560 million in the reported quarter, reflecting benefits of additional revenues from license updates and price increases. Within Desktop ecosystem, revenues from QuickBooks Desktop Enterprise grew at mid-single-digit pace.
In the fiscal first quarter, revenues from Consumer Group were up 19% year over year to $119 million, highlighting benefits of expansion in the DIY strategy and focus on transforming assisted segment with TurboTax Live.
Meanwhile, Strategic Partner Group backed by professional tax, generated revenues of $23 million, up 21% year over year.
Management is optimistic on growing the clout of TurboTax Live and QuickBooks Live, which is expected to aid the company acquire new customers, with enhanced engagement and drive average revenue per customer or ARPC. This is likely to be accretive to the company’s Consumer business in the days ahead.
Intuit also continued to fortify the application of AI to create tools to automate repetitive tasks, increase efficiency and improve customer experience.
Intuit’s non-GAAP operating income increased to $334 million from the $129 million reported in the year-ago quarter. Non-GAAP operating margin more than doubled to 25.3% from the 11.1% witnessed in first-quarter fiscal 2020.
Balance Sheet and Cash Flow
As of Oct 31, 2020, Intuit’s cash and cash equivalents were $5.8 billion compared with $6.44 billion as of Jul 31, 2020. The company intends to use $3.6 billion of cash and cash equivalents for paying consideration for the Credit Karma acquisition.
Notably, this February, Intuit agreed to buy Credit Karma for a total consideration of $7.1 billion. In June, the company issued $2 billion in senior notes to fund a portion of the acquisition and for other general corporate purposes.
The company did not repurchase any stock during the reported quarter. Intuit has $2.4 billion remaining on its authorization.
Additionally, Intuit announced that its board of directors has approved a quarterly cash dividend of 59 cents per share to be payable on Jan 19, 2021. The newly-approved cash dividend represents a year-over-year increase of 11%.
Outlook
For the fiscal second quarter, Intuit expects revenues to increase between 8% and 9% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of $1.31-$1.34 per share.
For fiscal 2021, it projects revenues in the band of $8.265-$8.415 billion, calling for year-over-year growth between 8% and 10%. Segment wise, Small Business and Self-Employed Group sales are anticipated to grow in the range of 8-10%, Consumer Group in the 9-10% band, and ProConnect Group between flat to increase of 1%.
The fiscal 2021 adjusted earnings are projected between $8.40 per share and $8.55 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted -26.94% due to these changes.
VGM Scores
Currently, Intuit has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Intuit has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.