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Buy This Top Tech Stock at New Highs and Hold for Years?
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Intuit (INTU - Free Report) joins together two unstoppable forces that help make it a strong buy-and-hold candidate: taxes and software. The tax and business software firm has expanded its offering through acquisitions and its stock price soared 465% in the last five years to blow away the Zacks Tech sector’s 200%.
Intuit shares hit brand new highs on Monday and it’s set to report its first quarter fiscal 2022 financial results on Thursday, November 18.
Essential Software
Intuit operates a relatively straightforward and essential business portfolio in a cloud and SaaS market that grows more crowded by the day. The company offers a variety of financial services and it’s arguably most famous for its online tax software, TurboTax.
INTU also sells software geared toward accounting, small business money management, and personal finance, including QuickBooks and Mint. And Intuit boosted its portfolio through two huge acquisitions in the last year.
The firm purchased consumer finance firm Credit Karma in December 2020. Intuit didn’t stop with the popular consumer finance firm known for its “free credit scores.” The company completed at the start of November its purchase of email-marketing powerhouse Mailchimp.
The addition of Mailchimp, which also provides digital-ad services and customer-relationship- management tools, helps INTU expand its reach to provide a wider array of services to small and midsize businesses, as well as entrepreneurs and beyond.
Image Source: Zacks Investment Research
Other Fundamentals
INTU paid roughly $12 billion for Mailchimp in a combination of cash and stock. The deal is its largest ever and topped last year’s roughly $8 billion for Credit Karma. Wall Street has loved both of the acquisitions that help make Intuit a highly-diversified software company for both consumers and small businesses, with the ability to package various offerings.
The Mountain View, California-based company boasts roughly 100 million customers globally and it’s grown its annual revenue by between 11% and 25% for the last six years, with the 25% expansion coming in its FY21—that was driven, in part, by its Credit Karma deal.
Zacks Estimates call for Intuit’s FY22 revenue to climb 16% to $11.17 billion and then jump over 12% higher in FY23. Meanwhile, its adjusted earnings are projected to surge 16% this year and another 15% next year. INTU has also consistently topped our bottom-line estimates, including a 43% average beat in the trailing four quarters.
INTU shares have destroyed the broader tech space as we mentioned at the outset, up 465% in the last five years vs. Zacks Tech sector’s 200%. The stock has also easily outclimbed business software standout Salesforce (CRM - Free Report) during this stretch and in the past 12 months.
Intuit has climbed 75% in the past year compared to the tech sector’s 36%. This includes an 11% run in the past month that’s pushed it to new highs. Despite the jump, INTU is not overbought at the momentum in terms of RSI levels.
Bottom Line
Intuit’s valuation is a tad stretched at the moment and its 0.43% dividend yield is less attractive than some other mega-cap tech stocks. Plus, the stock, which lands a Zacks Rank #3 (Hold) right now, could be due for some near-term selling given its run, even if it posts strong results and provides solid guidance on Thursday.
Luckily, investors with long-term horizons don’t need to worry as much about market timing. Think of all the years of gains you might have missed out on trying to avoid buying INTU at its “highs.” Plus, Wall Street remains high on the stock, with 14 of the 18 brokerage recommendations Zacks has at “Strong Buys.”
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Buy This Top Tech Stock at New Highs and Hold for Years?
Intuit (INTU - Free Report) joins together two unstoppable forces that help make it a strong buy-and-hold candidate: taxes and software. The tax and business software firm has expanded its offering through acquisitions and its stock price soared 465% in the last five years to blow away the Zacks Tech sector’s 200%.
Intuit shares hit brand new highs on Monday and it’s set to report its first quarter fiscal 2022 financial results on Thursday, November 18.
Essential Software
Intuit operates a relatively straightforward and essential business portfolio in a cloud and SaaS market that grows more crowded by the day. The company offers a variety of financial services and it’s arguably most famous for its online tax software, TurboTax.
INTU also sells software geared toward accounting, small business money management, and personal finance, including QuickBooks and Mint. And Intuit boosted its portfolio through two huge acquisitions in the last year.
The firm purchased consumer finance firm Credit Karma in December 2020. Intuit didn’t stop with the popular consumer finance firm known for its “free credit scores.” The company completed at the start of November its purchase of email-marketing powerhouse Mailchimp.
The addition of Mailchimp, which also provides digital-ad services and customer-relationship- management tools, helps INTU expand its reach to provide a wider array of services to small and midsize businesses, as well as entrepreneurs and beyond.
Other Fundamentals
INTU paid roughly $12 billion for Mailchimp in a combination of cash and stock. The deal is its largest ever and topped last year’s roughly $8 billion for Credit Karma. Wall Street has loved both of the acquisitions that help make Intuit a highly-diversified software company for both consumers and small businesses, with the ability to package various offerings.
The Mountain View, California-based company boasts roughly 100 million customers globally and it’s grown its annual revenue by between 11% and 25% for the last six years, with the 25% expansion coming in its FY21—that was driven, in part, by its Credit Karma deal.
Zacks Estimates call for Intuit’s FY22 revenue to climb 16% to $11.17 billion and then jump over 12% higher in FY23. Meanwhile, its adjusted earnings are projected to surge 16% this year and another 15% next year. INTU has also consistently topped our bottom-line estimates, including a 43% average beat in the trailing four quarters.
INTU shares have destroyed the broader tech space as we mentioned at the outset, up 465% in the last five years vs. Zacks Tech sector’s 200%. The stock has also easily outclimbed business software standout Salesforce (CRM - Free Report) during this stretch and in the past 12 months.
Intuit has climbed 75% in the past year compared to the tech sector’s 36%. This includes an 11% run in the past month that’s pushed it to new highs. Despite the jump, INTU is not overbought at the momentum in terms of RSI levels.
Bottom Line
Intuit’s valuation is a tad stretched at the moment and its 0.43% dividend yield is less attractive than some other mega-cap tech stocks. Plus, the stock, which lands a Zacks Rank #3 (Hold) right now, could be due for some near-term selling given its run, even if it posts strong results and provides solid guidance on Thursday.
Luckily, investors with long-term horizons don’t need to worry as much about market timing. Think of all the years of gains you might have missed out on trying to avoid buying INTU at its “highs.” Plus, Wall Street remains high on the stock, with 14 of the 18 brokerage recommendations Zacks has at “Strong Buys.”