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Analyst Blog

Intuit Inc. (INTU - Free Report) is expected to report first-quarter fiscal 2017 results on Nov 17. Last quarter, the company posted a positive earnings surprise of 43.48%. Notably, the stock has outperformed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 83.39%.

Let’s see how things are shaping up for this announcement.

Factors to Consider

Intuit reported better-than-expected fiscal fourth-quarter 2016 results. Its performance also improved on a year-over-year basis. Though the company posted a loss in the quarter, it fared better than the Zacks Consensus Estimate. Also revenues surpassed the same.

We are positive about Intuit’s growing SMB exposure and believe that its strategic acquisitions will boost the segment. Increased adoption of its cloud-based services and products is another positive.

The company is also concentrating on reimaging its products with the new mobile design. Its TurboTax solutions help customers prepare and file online tax returns through tablets, mobiles and desktop computers. These offerings are expected to expand its customer base, going forward.

Moreover, rising competition from payroll solution providers such as Paycom Software Inc. (PAYC - Free Report) and Automatic Data Processing is a concern, especially considering the seasonality of Intuit’s tax business and the ongoing economic uncertainty.

INTUIT INC Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Intuit will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 17 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Intuit’s Zacks Rank #3, when combined with its 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a couple of companies you may want to consider as our model shows that they both have the right combination of elements to post an earnings beat in their upcoming releases:

Asure Software, Inc. (ASUR - Free Report) , with an Earnings ESP of +14.29% and a Zacks Rank #3

Broadcom Limited (AVGO - Free Report) with an Earnings ESP of +1.74% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here

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