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Intuit (INTU) Stock Up 9% on Q1 Earnings Beat, Outlook Raised

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Shares of Intuit (INTU - Free Report) soared 9% in Thursday’s extended trading session after the financial software maker reported better-than-expected first-quarter fiscal 2022 results. The company’s revenues and earnings surpassed the respective Zacks Consensus Estimate and marked a significant year-over-year improvement.

Intuit reported fiscal first-quarter non-GAAP earnings of $1.53 per share, which beat the Zacks Consensus Estimate of 97 cents. The bottom-line increased 63% from the year-ago quarter’s earnings of 94 cents per share.

Revenues of $2 billion surpassed the consensus mark of $1.81 billion and climbed 52% year over year.

The year-over-year surge in the top and bottom lines reflect strong growth in the do-it-yourself category and solid revenue contribution from the newly acquired Credit Karma business. Credit Karma contributed $418 million to INTU’s quarterly total revenues.

Solid contribution from TurboTax Live was an upside. Also, solid customer growth was a top-line driver.

Intuit Inc. Price, Consensus and EPS Surprise Intuit Inc. Price, Consensus and EPS Surprise

Intuit Inc. price-consensus-eps-surprise-chart | Intuit Inc. Quote

Quarter in Detail

Segment wise, Small Business and Self-Employed Group revenues grew 22% year over year to $1.44 billion. This rise was driven by solid growth in customers for QuickBooks Online and a favorable mix-shift.

Total Online Ecosystem revenues climbed 36% year over year to $845 million. QuickBooks Online Accounting revenues were up 32% year over year to $519 million, mainly driven by mix-shift, higher pricing and customer growth.

Online Services revenues, which include payroll, payments, time tracking and capital, grew 42% year over year to $326 million. This was driven by strong performances at QuickBooks Online payroll and QuickBooks Online payments solutions.

Within the QuickBooks Online payroll, a mix-shift to Intuit’s full-service offering was a tailwind. Also, the continued uptick in the customer base drove revenues.

Total International online revenues increased 39% year over year on a constant-currency basis.

Total Desktop ecosystem revenues grew 7% year over year during the reported quarter to $598 million.

In the fiscal first quarter, revenues from Consumer Group increased to $120 million from $119 million. ProConnect Group’s professional tax revenues increased to $26 million from $23 million in the year-ago quarter.

Intuit’s non-GAAP operating income increased 66% to $555 million.

Balance Sheet and Cash Flow

As of Oct 31, 2021, Intuit’s cash and investments were $3.25 billion compared with $3.87 billion as of Jul 31, 2021. During the first quarter, the company generated an operating cash flow of $145 million.

Intuit repurchased stocks worth $339 million during the reported quarter. At the end of the first quarter, it had the remaining share-repurchase authorization of $3 billion.

Additionally, the company announced that its board has approved a quarterly cash dividend of 68 cents per share payable on Jan 18, 2022. The newly approved cash dividend represents a year-over-year increase of 15%.

Raised Fiscal 2022 Outlook

Buoyed by the overwhelming first-quarter performance and revenue contributions from the newly acquired Mailchimp business, Intuit raised its fiscal 2022 outlook. The company now projects revenues in the band of $12.165-$12.30 billion, up from $11.05-$11.20 billion projected previously. The updated guidance range calls for year-over-year growth of 26-28%.

Excluding Mailchimp, Intuit now expects revenue growth of 18-20%, up from the earlier guidance range of 15-16%.

The company raised its non-GAAP operating income growth guidance range to 25-27% from 16-18% projected previously. INTU anticipates non-GAAP operating income between $4.37 billion and $4.43 billion.

Intuit forecasts fiscal 2022 non-GAAP earnings per share between $11.48 and $11.64, revised upward from $11.05-$11.25 projected previously. The updated bottom-line guidance range calls for year-over-year growth of 18-20%, up from 13-16% anticipated earlier.

For the fiscal second quarter, Intuit expects revenues between 73% and 74% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of $1.84-$1.88 per share.

Zacks Rank & Stocks to Consider

Intuit currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Advanced Micro Devices (AMD - Free Report) , Qualcomm (QCOM - Free Report) and TD SYNNEX (SNX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 8 cents to 76 cents per share over the past 30 days. For 2021, the earnings estimates have been moved upward by 14 cents to $2.65 per share in the last 30 days.

Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 14%. Shares of the AMD stock have rallied 69% in the year-to-date (“YTD”) period.

The consensus mark for Qualcomm’s first-quarter fiscal 2022 earnings has been raised to $3 per share from $2.63 per share 30 days ago. For fiscal 2022, earnings estimates have been revised upward by a penny to $10.52 per share in the last seven days.

Qualcomm’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 11.2%. Shares of QCOM stock have gained 22.3% YTD.

TD SYNNEX’s consensus estimate for fourth-quarter fiscal 2021 earnings has been revised upward by 11.7% to $2.67 per share over the past 60 days. For fiscal 2021, earnings estimates have been moved upward by 6.5% to $8.95 per share over the last 60 days.

TD SYNNEX’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 15.4%. Shares of the SNX stock have rallied 40.1% YTD.

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