Intuit (INTU) AI Stock Analysis

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Intuit

(NASDAQ:INTU)

79Outperform

Intuit showcases strong financial performance with robust revenue growth, high profitability, and efficient cash flow management. The positive earnings call reinforces strong segment growth and strategic advancements, particularly in AI. However, the stock's high valuation and mixed technical indicators suggest cautious optimism. Monitoring debt levels and minor segment challenges remains important.

Positive Factors

Earnings and Revenue Growth

Revenue rose by 17% led by 20% growth in Global Business.

Market Valuation

Intuit is trading at a discount compared to the median of software coverage, leading to a Buy rating on the stock.

Strategic Investments

Intuit platform is underpinned by over 5 years of investment in data and AI, enabling 'done-for-you' experiences while solidifying its leadership position in the lower-end market and expanding into up-market.

Negative Factors

Competition and Pricing

Intensified competition could create downward pressure on product pricing and margins.

Market Concerns

Rising concerns on the durability of the Consumer Tax business are fully priced in.

Product Strategy

Strategy and product realignment for Mailchimp will take some time to yield results, with recovery expected by F4Q26.

Intuit (INTU) vs. S&P 500 (SPY)

Market Cap

$166.75B

Dividend Yield0.71%

Average Volume (3M)2.06M

Price to Earnings (P/E)55.7

Beta (1Y)1.02

Revenue Growth13.73%

EPS Growth9.93%

CountryUS

Employees18,800

SectorTechnology

Sector Strength40

IndustrySoftware - Application

Share Statistics

EPS (TTM)10.70

Shares Outstanding279,562,000

10 Day Avg. Volume2,276,599

30 Day Avg. Volume2,064,673

Financial Highlights & Ratios

PEG Ratio5.61

Price to Book (P/B)N/A

Price to Sales (P/S)9.84

Price to Cash Flow (P/CF)39.50

P/FCF Ratio38.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$715.89

Price Target Upside20.02% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering21

Intuit Business Overview & Revenue Model

Company DescriptionIntuit Inc. is a leading global financial technology company that specializes in software products for individuals, small businesses, and accountants. Operating primarily in the sectors of financial software and services, Intuit's core products include TurboTax, QuickBooks, Mint, and Credit Karma, which provide solutions for tax preparation, accounting, personal finance, and credit score monitoring, respectively. The company aims to empower consumers and businesses by simplifying financial management and ensuring financial stability.

How the Company Makes MoneyIntuit makes money through a diversified revenue model primarily based on the sale of software products and associated services. Key revenue streams include subscriptions and licenses for its flagship products like QuickBooks, a leading accounting software for small and medium-sized businesses, and TurboTax, a top tax preparation software for individuals and accountants. Intuit also generates income through transaction fees and financial services offered via its Mint and Credit Karma platforms, which include credit monitoring and financial advice. Additionally, Intuit benefits from partnerships with financial institutions and third-party developers who integrate their services and applications with Intuit's ecosystem. The company's revenue is further bolstered by its marketing and advertising solutions offered through these platforms, leveraging data analytics to provide targeted marketing opportunities.

Intuit Financial Statement Overview

Summary

Intuit's financial performance is robust, characterized by strong revenue growth, high profitability margins, and efficient cash flow management. The balance sheet remains strong with a balanced capital structure and high return on equity. While the company exhibits solid financial health, monitoring debt levels will be essential to maintain financial stability.

Income Statement

Very Positive

Intuit demonstrates strong revenue growth with a Revenue Growth Rate of 5.42% from 2024 to TTM (Trailing-Twelve-Months). The company maintains a robust Gross Profit Margin of 78.91% and a healthy Net Profit Margin of 17.69% in TTM. The EBIT Margin is solid at 22.24%, indicating effective cost management. However, the decline in EBITDA Margin from 28.13% in 2024 to 25.02% in TTM suggests a slight increase in operating expenses.

Balance Sheet

Very Positive

Intuit has a reasonable Debt-to-Equity Ratio of 0.39 in TTM, reflecting a balanced capital structure. The Return on Equity (ROE) is strong at 16.92% in TTM, indicating efficient use of equity. The Equity Ratio is stable at 56.66%, suggesting a healthy level of equity financing. However, the increase in Total Debt warrants monitoring.

Cash Flow

Very Positive

The company has shown a remarkable Free Cash Flow Growth Rate of 21.54% from 2024 to TTM. The Operating Cash Flow to Net Income Ratio is 1.91 in TTM, reflecting strong cash generation relative to earnings. Free Cash Flow to Net Income Ratio stands at 1.85, indicating efficient cash management. Continued growth in cash flow reflects solid operational performance.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
17.17B	16.29B	14.37B	12.73B	9.63B	7.68B
	Gross Profit
13.54B	12.82B	11.22B	10.32B	7.95B	6.30B
	EBIT
3.82B	3.63B	3.14B	2.57B	2.50B	2.18B
	EBITDA
4.53B	4.58B	4.04B	3.37B	2.95B	2.43B
	Net Income Common Stockholders
3.04B	2.96B	2.38B	2.07B	2.06B	1.83B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.17B	4.07B	3.66B	3.28B	3.87B	7.05B
	Total Assets
4.94B	32.13B	27.78B	27.73B	15.52B	10.93B
	Total Debt
1.19B	6.57B	6.60B	7.46B	2.41B	3.59B
	Net Debt
1.08B	2.96B	3.75B	4.66B	-148.00M	-2.85B
	Total Liabilities
2.33B	13.70B	10.51B	11.29B	5.65B	5.83B
	Stockholders Equity
2.62B	18.44B	17.27B	16.44B	9.87B	5.11B
Cash Flow		Free Cash Flow
5.63B	4.63B	4.79B	3.66B	3.13B	2.28B
	Operating Cash Flow
5.80B	4.88B	5.05B	3.89B	3.25B	2.41B
	Investing Cash Flow
-1.15B	-227.00M	-922.00M	-5.42B	-3.96B	-97.00M
	Financing Cash Flow
-3.73B	-397.00M	-4.27B	1.73B	-3.18B	2.03B

Intuit Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price596.48

Price Trends

50DMA

593.69

Positive

100DMA

616.39

Negative

200DMA

624.17

Negative

Market Momentum

MACD

4.40

Negative

RSI

54.71

Neutral

STOCH

61.07

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INTU, the sentiment is Neutral. The current price of 596.48 is below the 20-day moving average (MA) of 597.76, above the 50-day MA of 593.69, and below the 200-day MA of 624.17, indicating a neutral trend. The MACD of 4.40 indicates Negative momentum. The RSI at 54.71 is Neutral, neither overbought nor oversold. The STOCH value of 61.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for INTU.

Intuit Risk Analysis

Intuit disclosed 34 risk factors in its most recent earnings report. Intuit reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Intuit Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INTU	79 Outperform	$166.75B	55.74	17.43%	0.71%	13.73%	9.93%
WDAY	75 Outperform	$57.28B	107.64	6.15%	―	16.94%	-62.24%
CRM	75 Outperform	$254.83B	41.68	10.26%	0.66%	8.72%	51.47%
NOW	72 Outperform	$171.14B	120.75	16.53%	―	22.44%	-18.31%
FICO	63 Neutral	$41.83B	76.97	-47.82%	―	14.49%	21.85%
TEAM	59 Neutral	$48.89B	―	-32.59%	―	23.19%	11.01%
Sector *	57 Neutral	$20.31B	10.03	-14.49%	2.79%	5.15%	-23.76%

* Technology Sector Average

Performance Comparison

INTU

Intuit

596.48

-28.92

-4.62%

FICO

Fair Isaac

1,848.00

666.77

56.45%

CRM

Salesforce

265.17

-33.17

-11.12%

WDAY

Workday

231.42

-35.44

-13.28%

NOW

ServiceNow

825.95

56.76

7.38%

TEAM

Atlassian

209.62

4.88

2.38%

Intuit Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: 7.35% | Next Earnings Date: May 22, 2025

Earnings Call Sentiment Positive

The earnings call was predominantly positive, highlighting strong financial performance across multiple segments, significant advancements in AI-driven products, and successful expansion into mid-market segments. Although there were minor challenges, such as a slight decline in the ProTax Group and Mailchimp growth hurdles, these were overshadowed by the company's strong revenue growth and strategic achievements.

Highlights

Strong Revenue Growth

Intuit reported a 17% revenue growth for Q2 2025, demonstrating strong business performance across its segments.

Record Operating Income

GAAP operating income increased by 61% to $593 million, and non-GAAP operating income rose by 26% to $1.3 billion.

TurboTax Live Full Service Success

TurboTax Live Full Service achieved a Product Recommendation Score of 84, indicating high customer satisfaction and successful AI-driven enhancements.

Credit Karma Revenue Surge

Credit Karma revenue grew by 36%, driven by strength in credit cards, personal loans, and auto insurance.

Expansion in Mid-Market Segment

Intuit's focus on mid-market customers resulted in a 40% growth in Online Ecosystem revenue for QBO Advanced and Intuit Enterprise Suite.

Lowlights

ProTax Group Revenue Decline

ProTax Group revenue decreased by 1% in Q2.

Mailchimp Revenue Growth Challenges

Mailchimp's revenue growth was impacted by lapping of price changes, signifying ongoing challenges in scaling its business.

Company Guidance

During Intuit's second quarter fiscal 2025 conference call, the company provided robust guidance, reiterating its full-year expectations for double-digit revenue growth and expanding margins. Intuit reported a 17% increase in revenue for the quarter, totaling $4 billion, with GAAP operating income surging by 61% to $593 million. Non-GAAP operating income grew 26% to $1.3 billion, while GAAP diluted earnings per share rose 34% to $1.67. The company highlighted the strong performance of its Global Business Solutions Group, which saw a 19% revenue growth, driven by a 21% increase in Online Ecosystem revenue, excluding Mailchimp. Intuit's AI-driven initiatives played a crucial role in enhancing customer experiences and operational efficiencies, contributing nearly $90 million in annualized efficiencies in the first half of the year. Intuit's CEO, Sasan Goodarzi, emphasized the momentum in their AI-driven platform strategy, with significant progress in consumer platforms like TurboTax and Credit Karma, and a strong start in the tax season, expecting Consumer Group revenue growth of 7% to 8% for fiscal 2025. The company maintained its fiscal 2025 guidance, projecting total revenue growth between 12% and 13%, with GAAP and non-GAAP diluted earnings per share expected to grow by 18% to 20% and 13% to 14%, respectively.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.