Intuit Inc.
INTU
is currently one of the top performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals. Therefore, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio now.
The company has performed brilliantly over the past year and has the potential to carry on the momentum further.
Why an Attractive Pick?
Share-Price Appreciation:
Intuit’s price trend reflects that the stock has had an impressive run on the bourse over the past year. Shares of the company have surged 68.5% compared with the Zacks
Computer – Software
industry’s gain of 36.8% and the S&P 500’s 40.7%.
Image Source: Zacks Investment Research
Solid Rank & Growth Score:
Intuit currently flaunts a Zacks Rank #1 (Strong Buy) and has a Growth Score of B. Our research shows that stocks with a
Growth Score
of A or B, when combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Northward Estimate Revisions:
Analysts have raised the estimates for fiscal 2021 and fiscal 2022 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2021 and 2022 moved 94 cents and 97 cents north, respectively.
Positive Earnings Surprise History:
Intuit has an impressive earnings surprise history. The company outpaced estimates in all of the trailing four quarters, delivering an average earnings surprise of 49.7%.
Stellar Growth Prospects:
The Zacks Consensus Estimate of $9.35 for fiscal 2021 earnings suggests growth of approximately 19% from the year-ago period. The long-term earnings per share growth rate is estimated to be 14.8%.
Growth Drivers:
Intuit is benefiting from strong demand for its tax products, improving customer retention rates and expanding subscriber base.
The space in which Intuit operates has huge growth opportunity. There are more than 29 million small and medium businesses in the United States alone. Moreover, the company, with its QuickBooks Online Advanced solution, is now targeting the mid-market. Furthermore, the number of individuals preferring to file their income tax themselves is increasing rapidly, thereby widening the scope for Intuit’s TurboTax software.
In addition, the company’s strategy of shifting its business to cloud-based subscription model will help generate stable revenues over the long run. Cloud-based solutions, as against software-based ones, have gained popularity as they offer anywhere, anytime access. Cloud is a flourishing part of the technology space and has been gaining momentum in recent years. It is a process by which data or software is stored outside of a computer and is accessible from anywhere any time via the Internet. This revolutionary idea can lower IT costs of companies by cutting down the need for servers and staff.
Furthermore, over the last few years, Intuit has divested some of its non-core businesses, including Quicken, QuickBase and Demandforce, in a move to focus more on its core tax and accounting businesses. We believe Intuit’s initiatives have provided it the much needed funds to invest in and focus more on the fast-growing online businesses. The company looks forward to add more recurring revenues within its Consumer Tax and Small Business segments, capitalizing on the ongoing shift toward digital solutions. Intuit’s efforts to convert itself into a cloud-based tax and accounting solution provider are encouraging.
Additionally, last year’s acquisition of Credit Karma has expanded Intuit’s customer base by adding 110 million Credit Karma customers to its existing 57-million user base. With this acquisition, Intuit will help its customers better manage their personal finance requirements.
Other Stocks to Consider
Other top-ranked stocks in the broader technology sector include
Lam Research Corporation
LRCX
,
Digital Turbine, Inc.
APPS
and
Facebook
FB
, all sporting a Zacks Rank #1 (Strong Buy) at present.
The long-term earnings growth rate for Lam Research, Digital Turbine, and Facebook is currently pegged at 32.8%, 50% and 20.1%, respectively.
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