company background image
INTU

Intuit NasdaqGS:INTU Stock Report

Last Price

US$409.29

Market Cap

US$115.4b

7D

0.1%

1Y

-25.2%

Updated

28 Sep, 2022

Data

Company Financials +
INTU fundamental analysis
Snowflake Score
Valuation3/6
Future Growth4/6
Past Performance2/6
Financial Health4/6
Dividends0/6

INTU Stock Overview

Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally.

Intuit Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Intuit
Historical stock prices
Current Share PriceUS$409.29
52 Week HighUS$716.86
52 Week LowUS$339.36
Beta1.18
1 Month Change-6.30%
3 Month Change6.19%
1 Year Change-25.17%
3 Year Change57.15%
5 Year Change186.88%
Change since IPO15,369.22%

Recent News & Updates

Sep 28

Intuit opens new Canadian headquarters

Intuit (NASDAQ:INTU) has established a new Canadian headquarters in Toronto's downtown core as part of its global growth strategy. The 116,000 sq ft space, located in 'The Well' at Front Street West and Spadina Avenue, is the firm's first global site to incorporate its workplace of the future design. It features open collaboration spaces, active areas, project rooms, social hubs and library.

Aug 30

Intuit's Q4 And FY 2022: What If There's A Recession?

Summary Intuit posted solid numbers for Q4 and its full fiscal year, underlining that the company might be more protected from macro than many think. Strength was broad-based and across all segments, although Credit Karma is decelerating a bit as it faces tough comps and an uncertain economy. Management explained in detail how they view the company in a mild recession. We go over this. Something is not working at Mailchimp, but Intuit is reacting quickly. Guidance was undoubtedly the highlight of the release, especially in the small business and self-employed segment. Introduction Despite the uncertain macro environment, Intuit (INTU) reported strong Q4 2022 and full-year earnings last week. Just to make clear, that's not a typo, the company's fiscal year doesn't match the calendar year. Seeing how earnings have gone for the rest of the companies, it was pretty evident that the company would manage to beat expectations, but all eyes were on the guidance for next year. We don't see Intuit as exposed to a worsening macro as others do, and results might be starting to prove us right, although it's still too soon to call out victory. Before starting, take into account that we will mostly focus on yearly numbers as this is how we feel we can really understand how the company is performing. Before going directly into the numbers, let's briefly go over the market's reaction. The market's reaction The market reacted positively to the company's earnings, and the stock jumped significantly in after-hours trading. "Significantly" must be understood in the context of a $100 billion market cap business, of course. The stock lost a bit of steam as the day advanced: YCharts Seeing a stock we own go up is great, although we believe the best combination for long-term investors to be strong earnings coupled with a decreasing stock price. This way, we get to add cheaper to a business that has "earned" our purchase. If we zoom out a bit, we can see that Intuit is still significantly off its all-time high, although at the same time, it has recovered quite a bit from June's bottom: YCharts The company was probably overvalued last year, but the market typically overshoots both ways. It's just human nature in play. Without further ado, let's jump directly into the numbers! The numbers Intuit's numbers were solid, especially considering that we are currently in a tough macro environment and the company is supposedly exposed to macro headwinds. As we did last quarter, we'll first go over the headline numbers, and then we'll double-click on some of the company's segments. The headline numbers Intuit managed to beat the consensus on both the top and bottom lines. The beat was more significant in the bottom line, underscoring the company's ability to control its margins by adjusting quickly to changing conditions: Made by Best Anchor Stocks A beat by Intuit should not take us by surprise. The company has managed to outperform the market's estimates consistently, despite quarterly metrics being quite volatile due to its tax business: Seeking Alpha Digging into revenue Total quarterly revenue came out at $2.4 billion, down 6% year-over-year, while total yearly revenue came in at $12.7 billion, a 32% increase year-over-year: Made by Best Anchor Stocks The quarterly decrease might look worrying, but it was simply a result of an earlier tax season this year. For context, last quarter's revenue grew 35% year-over-year, which was also the result of this earlier tax season. When it comes to Intuit, it makes little sense to focus on quarters as there's little the company can do to control the tax deadline. Mailchimp's acquisition closed this year, so we must "take out" its revenue to arrive at an organic revenue growth rate. Credit Karma was also a tailwind to inorganic yearly revenue as Intuit did not own it for the entire year of 2021. However, management only gave the organic growth number excluding Mailchimp. Yearly organic revenue grew 24% year over year while quarterly organic revenue decreased 16% year over year: Made by Best Anchor Stocks Turning to revenue across segments, we saw impressive strength in the Small Business and Self-Employed segment, which grew at a healthy clip, 22% year over year, even when ignoring Mailchimp. Credit Karma's growth decelerated significantly in the quarter (we'll go over the causes later on) but posted an outstanding year, growing 58% year-over-year: Made by Best Anchor Stocks Some of these growth rates lay well above management's expected long-term revenue CAGR for the different segments, so we should expect a normalization going forward. Credit Karma: Comps are getting much tougher now, and macro is having a slight impact Since joining Intuit, Credit Karma has greatly accelerated its yearly revenue. It grew 37% last year and 58% this year on a proforma basis. Pro-forma means that the company assumes it owned Credit Karma during the entire 2021: Made by Best Anchor Stocks This abrupt acceleration makes sense as management quickly took advantage of synergies with Turbotax. Credit Karma posted its strongest quarter ever on record, but growth decelerated significantly from last quarter (48% year over year growth). Credit Karma revenue came in at $475 million, a 17% increase year over year: Made by Best Anchor Stocks Tough comps were part of the reason for the deceleration, as Credit Karma grew 28% sequentially in Q4 last year. Q4 2022 was basically the first quarter where the segment was being compared apples to apples (i.e., with a "fully-integrated" product in both periods). The highlight for Credit Karma was Lightbox, its proprietary technology to match lenders' offers with Credit Karma members while improving approval rates. As of year-end, Lightbox represented 70% of credit card and personal loan transactions, up from 55% last year. This is important because Credit Karma's resiliency lies partly in this product: We expect Lightbox to help make Credit Karma's business more resilient in a recessionary environment. There's a huge flight to quality by our partners. Source: Sasan Goodarzi (Intuit CEO) during Q4 2022 earnings call We thought Credit Karma was more resilient than people thought, and it's starting to play out. Not only should Lightbox help Intuit be more resilient, but it might also help the company come out stronger from a recession, once lending partners have tried and trained Lightbox. Of course, it's difficult to think of a scenario where a recession would be a net positive for Credit Karma, but we must look ahead despite some macro headwinds starting to impact the company: Although several personal loan partners tightened underwriting during the quarter, we were able to offset some of this with volume from other partners. Source: Sasan Goodarzi (Intuit CEO) during Q4 2022 earnings call 17% growth doesn't seem high, but it's more than decent considering all the context (tough comps, macro…). The company has not changed its long-term revenue CAGR expectations for Credit Karma of 20-25%, which is great. Growth might look lumpy, but the CAGR is what we should really care about. Small business and Self-Employed Group - Growing fast despite Mailchimp We have to dig a bit deeper than the headline numbers in the Small business and Self-Employed Group. Yearly revenue grew 38% and 22% on an organic basis. This was an organic acceleration, which is great to see: Made by Best Anchor Stocks The acceleration was driven by an acceleration in online ecosystem revenue, which grew 61% in the year and 32% excluding Mailchimp. To grow online ecosystem revenue, management focuses on three pillars, which build some sort of a funnel. The three pillars grew at a healthy clip, underscoring that growth might be far from over. The first pillar is to grow the core, which relies on growing the accounting offering. Accounting is the sticky part of Quickbooks, and it grew 33% in 2022. Once customers are locked-in accounting, the company cross-sells different offerings (capital, payments, Mailchimp…) to connect the ecosystem. These services are encompassed in online services revenue, which grew 107% in 2022, 34% without including Mailchimp. The last step is something the company expects to accelerate with the addition of Mailchimp, which is expanding globally. International online ecosystem revenue grew fast in the year, but it was mostly inorganic growth. You can find below a summary of how the different online ecosystem segments grew during the year: Made by Best Anchor Stocks Intuit also sells some of its products offline, as some customers are reluctant to switch to online. Desktop ecosystem revenue grew 4% in the year, but the highlight is that the transition to SaaS is almost complete: Nearly all of our desktop accounting revenue is now subscription-based, similar to our online accounting offerings. Source: Michelle Clatterbuck (Intuit CFO) during Q4 2022 earnings call All in all, it was an outstanding performance by the small and medium business segment, with all the pillars in the funnel growing at a healthy clip. This said, the most important thing is that the resilience of this segment is increasing by the day, as it becomes more mission-critical for businesses and helps them weather an economic downturn: We are not a line item on the small businesses budget. We are the platform that fuels their success. We are mission-critical. Without our platform, a small business can't run their business. And so it's really important to have that frame of mind as to what's the role that we play in the lives of small businesses. Source: Sasan Goodarzi (Intuit CEO) during Q4 2022 earnings call There was a highlight and a lowlight for this segment. The highlight was that the long-term revenue compound annual growth rate expectation was revised upward and the lowlight was that Mailchimp is not performing as expected. We'll talk about both later on. Consumer group - Being able to zoom out With a full year under our belts, we can now zoom out to see what the actual performance of the consumer group segment has been. The past years have been somewhat lumpy from a quarterly performance standpoint due to a volatile tax season. However, taxes must be done every year, so yearly metrics do give us insight into the performance of the consumer group. Consumer group revenue grew 10% to $3.9 billion in 2022: Made by Best Anchor Stocks It's a deceleration when compared to last year, but it still is inside management's long-term expectation of 9-12% growth. We are not worried about minor variations in this segment's growth rate because we believe it's one of Intuit's most predictable and resilient segments. Growth came from gaining market share and growth of average revenue per return. The fact that Turbotax keeps gaining market share despite being the indisputable leader by a mile is no surprise to us. The tax industry seems like a winner-takes-most market as it enjoys a double-sided flywheel where more Turbotax users make the software more valuable for tax experts, incentivizing them to use it. It also makes up a small chunk of a customer's budget and is mission-critical, fueling its stickiness. There have also been rumors about the government launching a free tax offering and how this might impact Turbotax. While it's undoubtedly better not to have competition from the government, we don't think it changes much. In Spain, we have free tax filing software provided by the government, but private tax offerings are quickly gaining in popularity. We believe this is because the government will never help you minimize your taxes (as they are their revenue) and will never help you file complex returns. As long as Turbotax can help you save money and help you file a complex return, we don't see how a government offering will have a large impact. Remember that simple tax offerings are already free in Turbotax. Profitability - Contracting margins but back to margin expansion next year Both GAAP and non-GAAP yearly EPS were impacted by the $141 million one-time payment the company made to leave the advertising claims behind. We discussed this one-time expense in our last earnings recap. With this impact, GAAP EPS decreased 4% in 2022, whereas non-GAAP EPS increased 22%: Made by Best Anchor Stocks There was margin contraction at both the GAAP and non-GAAP levels, and the primary divergences between both were created by share-based compensation and amortization of acquired intangibles, in that order. After two years of margin contraction, the company now guides for margin expansion in 2023. Net income was almost identical in 2022 than 2021, but cash flow from operations grew 20%, aided by higher non-cash items (such as SBC and amortization). Cash flow was negatively impacted by certain changes in current assets and liabilities, none of which appear worrying. It's important to recall that Intuit is not optimized for margins right now and that management expects to expand margins as it grows and becomes more efficient with technology. Qualitative highlights We always say that numbers are important, but so is the context. The qualitative highlights help us understand what things might impact the numbers in the future, and we should closely monitor them. Let's start with the most trending topic right now: a possible recession. Intuit in a mild recession Sasan Goodarzi, Intuit's CEO, did a great job outlining how a mild recession might impact the company. He already did this last quarter, but he was more specific this quarter to help investors understand what percentage of the company might be at risk. In 2022, revenue was divided as follows across the different segments: Made by Best Anchor Stocks Management expects the tax business to be very resilient amidst a mild recession, so there goes 35% of the company (Consumer and ProConnect). We agree with them here as people have to do their taxes irrespective of the economic environment. The Small business segment makes up around 51% of the company. Of this revenue, 80% is subscription-based, and 20% is transactional-based. This means that this 20% would be much more at risk. This 20% makes up around 10% of the total revenue for the company (0.51*0.2). Though we don't expect that all of the 80% that's subscription-based will be as resilient as the tax business, accounting should indeed be as resilient. Accounting made up 24.5% of total revenue, so we'll include this in the "tax pile" regarding resiliency. Lastly, Credit Karma is expected to be the most exposed segment to a downturn due to the nature of the credit cycle, and it made up 14% of revenue. If we separate these segments we have just discussed into three different levels of resiliency, we get the following: Made by Best Anchor Stocks To this, we have to add the company's solid financial position with $3.9 billion in cash plus short-term investments and $6.9 billion in debt: We have a strong balance sheet that enables us to play offense in any macro environment. Source: Michelle Clatterbuck (Intuit CFO) during Q4 2022 earnings call

Shareholder Returns

INTUUS SoftwareUS Market
7D0.1%0.1%-2.0%
1Y-25.2%-30.0%-20.3%

Return vs Industry: INTU exceeded the US Software industry which returned -31.6% over the past year.

Return vs Market: INTU underperformed the US Market which returned -22.1% over the past year.

Price Volatility

Is INTU's price volatile compared to industry and market?
INTU volatility
INTU Average Weekly Movement5.2%
Software Industry Average Movement8.9%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: INTU is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: INTU's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198317,300Sasan Goodarzihttps://www.intuit.com

Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in four segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProConnect. The Small Business & Self-Employed segment provides QuickBooks online services and desktop software solutions comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; QuickBooks Self-Employed solution; QuickBooks Commerce, a solution for product-based businesses; QuickBooks Online Accountant; and payroll solutions, such as online payroll processing, direct deposit of employee paychecks, payroll reports, electronic payment of federal and state payroll taxes, and electronic filing of federal and state income tax returns.

Intuit Inc. Fundamentals Summary

How do Intuit's earnings and revenue compare to its market cap?
INTU fundamental statistics
Market CapUS$115.37b
Earnings (TTM)US$2.07b
Revenue (TTM)US$12.73b

55.8x

P/E Ratio

9.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
INTU income statement (TTM)
RevenueUS$12.73b
Cost of RevenueUS$2.27b
Gross ProfitUS$10.46b
Other ExpensesUS$8.39b
EarningsUS$2.07b

Last Reported Earnings

Jul 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.33
Gross Margin82.19%
Net Profit Margin16.23%
Debt/Equity Ratio42.1%

How did INTU perform over the long term?

See historical performance and comparison

Dividends

0.8%

Current Dividend Yield

37%

Payout Ratio

Does INTU pay a reliable dividends?

See INTU dividend history and benchmarks
When do you need to buy INTU by to receive an upcoming dividend?
Intuit dividend dates
Ex Dividend DateOct 06 2022
Dividend Pay DateOct 18 2022
Days until Ex dividend6 days
Days until Dividend pay date18 days

Does INTU pay a reliable dividends?

See INTU dividend history and benchmarks