Intuit
INTU
lowered its third-quarter fiscal 2021 outlook to reflect the extension of the tax filing deadline from Apr 15 to May 17, leading to a revenue shift. Notably, the Internal Revenue Service (IRS) extended the deadline to help taxpayers navigate the unusual circumstances related to the pandemic.
For the third quarter, Intuit now projects revenues between $4.165 billion and $4.170 billion, significantly down from the prior projection of $4.605-$4.655 billion. The Zacks Consensus Estimate for revenues is pegged at $4.620 billion, indicating year-over-year growth of 54%.
Intuit forecasts operating income in the band of $2.195-$2.200 billion on a non-GAAP basis. Earlier, the company had projected a non-GAAP operating income of $2.475-$2.515 million.
The QuickBooks software maker has also trimmed its earnings guidance range. On a non-GAAP basis, Intuit now anticipates reporting earnings per share (EPS) of $6-$6.5. Previously, it had forecasted EPS in a band of $6.75-$6.85.
Fiscal 2021 Guidance Raised
Despite the third-quarter view cut, Intuit raised its fiscal 2021 outlook, issued on Feb 23, 2021. Management said that continued innovation and value-additions to customers are driving growth momentum, which is encouraging the company to anticipate exceeding the high end of its full-year revenue guidance.
Notably, the company also raised its GAAP and non-GAAP operating income and EPS guidance.
Sasan Goodarzi, CEO, Intuit, said, “The velocity of our innovation is accelerating, delivering benefits for our customers and growth across the company. We’re proud of the progress we’ve made and expect to exceed the top end of our guidance for the full year.”
One of the factors which prompted Intuit to raise its full-year guidance is the strong performance of Credit Karma during the month of March. Moreover, the company noted that the growth of new customers of QuickBooks Online, customer retention, charge volume per customer and the number of companies running payroll have all surpassed pre-pandemic levels.
Further, Intuit expects TurboTax Live’s customer growth to surge more than 70% year over year at the end of the full fiscal year. TurboTax’s share of total returns is also expected to increase year over year.
Zacks Rank and Stocks to Consider
Intuit currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include
Alphabet Inc.
GOOGL
,
Lam Research Corporation
LRCX
and
LG Display Co., Ltd.
LPL
, all sporting a Zacks Rank #1 (Strong Buy), at present. You can see
the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Alphabet, Lam Research and LG Display is currently pegged at 18.13%, 32.8% and 32.56%, respectively.
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