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Intuit (INTU) to Report Q2 Earnings: What's in the Offing?
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Intuit Inc. (INTU - Free Report) is slated to release second-quarter 2021 results on Feb 23.
Notably, in December 2020, the company had raised its second-quarter fiscal 2021 sales guidance to $1.935-$1.965 billion, considering the synergies from the Credit Karma acquisition completed in early December.
For the second quarter, Intuit now projects revenues between $1.570 billion and $1.575 billion, significantly down from the prior projection of $1.935-$1.965 billion. Its updated guidance suggests a year-over-year decline of 7.1-7.4%. The Zacks Consensus Estimate for revenues is pegged at $1.57 billion, indicating a year-over-year decline of 7.23%.
On a non-GAAP basis, Intuit now anticipates reporting earnings of 67-68 cents per share. Previously, it had forecasted earnings in a band of $1.25-$1.31 per share. The consensus mark for earnings is pegged at $1.06 per share, suggesting a decline of 8.62% from the year-ago quarter’s earnings.
Intuit’s earnings beat estimates in the trailing four quarters, the average surprise being 52.79%.
Let’s see how things have shaped up prior to the upcoming announcement.
Intuit’s top line is likely to have been driven by solid growth in the Online Ecosystem, aided by an expanding subscriber base for Quickbooks Online. Notably, the Zacks Consensus Estimate for total Online Ecosystem revenues is pegged at $623 million for the quarter under review, indicating a 17.5% increase from the prior-year quarter. The consensus mark for Quickbooks Online’s revenues is pinned at $395 million, suggesting a 19.7% improvement year on year.
Furthermore, growth in the TurboTax Live offering is likely to have been accretive to the Consumer tax business during the fiscal first quarter, driven by growing customer engagement. The Zacks Consensus Estimate for revenues of $553 million from the Consumer tax business calls for growth of 10.8% year over year.
Solid momentum of the company’s lending product, QuickBooks Capital, is a positive as well.
However, a full quarter with raised prices is expected to negatively impact Small Business and Self Employed revenue growth in the quarter to be reported.
Moreover, elevated expenses associated with the Credit Karma acquisition are likely to have impacted the bottom line adversely.
Further, per management’s expectations, a continued drop in customer retention rate is likely to have weakened growth in the second quarter.
Besides, management expects its Desktop Ecosystem to display a gradual decline. The consensus mark for Desktop Ecosystem revenues is pegged at $430 million, calling for a 2.9% decline year over year.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Intuit this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Intuit currently has a Zacks Rank of 4 (Sell) and an Earnings ESP of -36.64%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Workday, Inc. (WDAY - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank of 2, currently.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +6.90% and currently, a Zacks Rank of 3.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Intuit (INTU) to Report Q2 Earnings: What's in the Offing?
Intuit Inc. (INTU - Free Report) is slated to release second-quarter 2021 results on Feb 23.
Notably, in December 2020, the company had raised its second-quarter fiscal 2021 sales guidance to $1.935-$1.965 billion, considering the synergies from the Credit Karma acquisition completed in early December.
However, the company recently lowered its second-quarter fiscal 2021 outlook to reflect the impact of the late tax-season opening.
For the second quarter, Intuit now projects revenues between $1.570 billion and $1.575 billion, significantly down from the prior projection of $1.935-$1.965 billion. Its updated guidance suggests a year-over-year decline of 7.1-7.4%. The Zacks Consensus Estimate for revenues is pegged at $1.57 billion, indicating a year-over-year decline of 7.23%.
On a non-GAAP basis, Intuit now anticipates reporting earnings of 67-68 cents per share. Previously, it had forecasted earnings in a band of $1.25-$1.31 per share. The consensus mark for earnings is pegged at $1.06 per share, suggesting a decline of 8.62% from the year-ago quarter’s earnings.
Intuit’s earnings beat estimates in the trailing four quarters, the average surprise being 52.79%.
Let’s see how things have shaped up prior to the upcoming announcement.
Intuit Inc. Price and EPS Surprise
Intuit Inc. price-eps-surprise | Intuit Inc. Quote
Factors to Consider
Intuit’s top line is likely to have been driven by solid growth in the Online Ecosystem, aided by an expanding subscriber base for Quickbooks Online.
Notably, the Zacks Consensus Estimate for total Online Ecosystem revenues is pegged at $623 million for the quarter under review, indicating a 17.5% increase from the prior-year quarter. The consensus mark for Quickbooks Online’s revenues is pinned at $395 million, suggesting a 19.7% improvement year on year.
Furthermore, growth in the TurboTax Live offering is likely to have been accretive to the Consumer tax business during the fiscal first quarter, driven by growing customer engagement. The Zacks Consensus Estimate for revenues of $553 million from the Consumer tax business calls for growth of 10.8% year over year.
Solid momentum of the company’s lending product, QuickBooks Capital, is a positive as well.
However, a full quarter with raised prices is expected to negatively impact Small Business and Self Employed revenue growth in the quarter to be reported.
Moreover, elevated expenses associated with the Credit Karma acquisition are likely to have impacted the bottom line adversely.
Further, per management’s expectations, a continued drop in customer retention rate is likely to have weakened growth in the second quarter.
Besides, management expects its Desktop Ecosystem to display a gradual decline. The consensus mark for Desktop Ecosystem revenues is pegged at $430 million, calling for a 2.9% decline year over year.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Intuit this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Intuit currently has a Zacks Rank of 4 (Sell) and an Earnings ESP of -36.64%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
3D Systems Corporation (DDD - Free Report) has an Earnings ESP of +29.6% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Workday, Inc. (WDAY - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank of 2, currently.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +6.90% and currently, a Zacks Rank of 3.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>