Shares of Intuit Inc. (INTU - Free Report) rallied to a new 52-week high of $209.54, eventually closing at $209.50 on Jun 6.
This rise in share price can be primarily attributed to better-than-expected third-quarter fiscal 2018 results on the back of a successful tax season. Earnings and revenues also recorded year-over-year improvement.
Intuit’s revenues of $2.925 billion jumped 15% year over year and non-GAAP earnings of $4.82 per share marked increased 24%. The stellar third-quarter results prompted an increase in the fiscal 2018 guidance as well. Management also provided encouraging guidance for the current quarter.
Notably, investors remain optimistic about the stock’s prospects. Intuit stock has gained 47.5% over the past year, substantially outperforming the 31.9% rally of the industry it belongs to.
Driving Factors in Detail
Management is extremely optimistic about the operational efficiency portrayed during the tax season that has been a strong tailwind for its financials. The impressive performance of the DIY category and higher average revenue per return aided growth.
TurboTax Live experienced success in the first tax season and is expected to drive the company’s consumer business going forward. Additionally, the recently launched Turbo offering also witnessed healthy adoption. The commendable performance of Turbo that provides a snapshot of a user’s financial health is yet another positive for the expansion of the company’s business beyond tax.
Due to the continuously emerging new technologies and current market trends, cloud-based business and financial software solutions have been gaining momentum. Intuit, which is already a market leader in this segment, benefited from increased adoption, which has helped it gain new customers and in turn, boosted overall performance.
Additionally, the company’s strategy of shifting to a cloud-based subscription model is expected to help this Zacks Rank #2 (Buy) company generate more stable revenues in the long run.
Other Stocks to Consider
Some other top-ranked stocks include NVIDIA Corporation (NVDA - Free Report) , Western Digital Corporation (WDC - Free Report) and Micron Technology, Inc. (MU - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for NVIDIA, Western Digital and Micron is currently projected to be 10.25%, 19% and 10%, respectively.
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