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Buy this Large-Cap Tech Stock Now and Hold Forever?
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Intuit Inc. ((INTU - Free Report) ) shares have climbed 45% YTD and 680% in the 10 years to blow away Tech’s 245%, driven by the consistent expansion of its tax-focused software.
The company utilized the last several years to beef up its portfolio into personal finance and more. Intuit currently trades around 20% below its all-time highs heading into Q1 fiscal 2024 earnings release on November 28.
Taxes, Accounting & Beyond
Intuit, which is perhaps most famous for TurboTax, boasts a growing portfolio that includes QuickBooks, Mint, Credit Karma, and Mailchimp. Inuit currently offers various tools and software for taxes, accounting, and small business money management, alongside email marketing, digital-ad services, customer-relationship-management, credit scores and other personal financial services.
Inuit’s array of offerings help it benefit from the expansion of multiple key segments of the economy that are unlikely to go out of style anytime soon.
Intuit boasts over 100 million global customers and it grew its revenue by between 11% and 32% for seven years running. INTU expanded its revenue from under $4 billion in fiscal 2013 to $14.37 billion in FY23 (period ended on July 31, 2023).
Image Source: Zacks Investment Research
Recent Growth and Outlook
Intuit’s revenue is projected to climb by 12% in FY24 and another 13% in FY25 to hit $18 billion. Current Zacks estimates call for INTU to post 14% adjusted earnings growth this year and 13% higher EPS in FY25.
INTU’s earnings outlook has held up over the last year-plus, even as many companies and tech firms saw their EPS outlooks fade. Intuit, which lands a Zacks Rank #3 (Hold) right now, has beaten our quarterly EPS estimates by an average of 30% in the trailing four quarters.
Image Source: Zacks Investment Research
Performance, Technical Levels & Valuation
Intuit shares have skyrocketed over 2,100% during the last 20 years to blow away the Zacks tech sector’s 466% and Microsoft’s 1,400%. INTU also more than doubled the tech space over the past decade.
Intuit has, however, lagged the broader Zacks tech sector over the last two years, down around 15%. INTU trades about 20% below its own all-time highs, even though it is up 45% YTD. The software stock is also trading solidly above its 50-day moving average once again after its recent surge alongside the market.
Intuit is hardly a value stock, trading at 47.6X forward 12-month earnings. But this marks a 40% discount to its own 10-year highs, and Wall Street has been willing to pay up for INTU’s consistent growth for the last 10 years. Plus, INTU’s PEG ratio, which factors in its long-term EPS growth outlook, offers 42% value vs. its own highs at 3.3.
Image Source: Zacks Investment Research
Bottom Line
Intuit’s balance sheet is solid despite making two big acquisitions over the last several years. Intuit boosted its FY24 dividend by 15%, and it has nearly $4 billion remaining under its current share repurchase authorization. And Wall Street is high on Intuit stock, with 20 of the 25 brokerage recommendations Zacks has at “Strong Buys.”
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Buy this Large-Cap Tech Stock Now and Hold Forever?
Intuit Inc. ((INTU - Free Report) ) shares have climbed 45% YTD and 680% in the 10 years to blow away Tech’s 245%, driven by the consistent expansion of its tax-focused software.
The company utilized the last several years to beef up its portfolio into personal finance and more. Intuit currently trades around 20% below its all-time highs heading into Q1 fiscal 2024 earnings release on November 28.
Taxes, Accounting & Beyond
Intuit, which is perhaps most famous for TurboTax, boasts a growing portfolio that includes QuickBooks, Mint, Credit Karma, and Mailchimp. Inuit currently offers various tools and software for taxes, accounting, and small business money management, alongside email marketing, digital-ad services, customer-relationship-management, credit scores and other personal financial services.
Inuit’s array of offerings help it benefit from the expansion of multiple key segments of the economy that are unlikely to go out of style anytime soon.
Intuit boasts over 100 million global customers and it grew its revenue by between 11% and 32% for seven years running. INTU expanded its revenue from under $4 billion in fiscal 2013 to $14.37 billion in FY23 (period ended on July 31, 2023).
Image Source: Zacks Investment Research
Recent Growth and Outlook
Intuit’s revenue is projected to climb by 12% in FY24 and another 13% in FY25 to hit $18 billion. Current Zacks estimates call for INTU to post 14% adjusted earnings growth this year and 13% higher EPS in FY25.
INTU’s earnings outlook has held up over the last year-plus, even as many companies and tech firms saw their EPS outlooks fade. Intuit, which lands a Zacks Rank #3 (Hold) right now, has beaten our quarterly EPS estimates by an average of 30% in the trailing four quarters.
Image Source: Zacks Investment Research
Performance, Technical Levels & Valuation
Intuit shares have skyrocketed over 2,100% during the last 20 years to blow away the Zacks tech sector’s 466% and Microsoft’s 1,400%. INTU also more than doubled the tech space over the past decade.
Intuit has, however, lagged the broader Zacks tech sector over the last two years, down around 15%. INTU trades about 20% below its own all-time highs, even though it is up 45% YTD. The software stock is also trading solidly above its 50-day moving average once again after its recent surge alongside the market.
Intuit is hardly a value stock, trading at 47.6X forward 12-month earnings. But this marks a 40% discount to its own 10-year highs, and Wall Street has been willing to pay up for INTU’s consistent growth for the last 10 years. Plus, INTU’s PEG ratio, which factors in its long-term EPS growth outlook, offers 42% value vs. its own highs at 3.3.
Image Source: Zacks Investment Research
Bottom Line
Intuit’s balance sheet is solid despite making two big acquisitions over the last several years. Intuit boosted its FY24 dividend by 15%, and it has nearly $4 billion remaining under its current share repurchase authorization. And Wall Street is high on Intuit stock, with 20 of the 25 brokerage recommendations Zacks has at “Strong Buys.”