Mizuho maintains Intuit stock Outperform with $765 target

On Thursday, Mizuho (NYSE:MFG) Securities reiterated its Outperform rating on Intuit Inc. (NASDAQ:INTU), a $165 billion market cap software giant, along with maintaining a price target of $765.00. According to InvestingPro data, the stock is currently trading slightly below its Fair Value, with analysts’ targets ranging from $530 to $860. The endorsement follows a series of investor meetings with Intuit’s CEO, Sasan Goodarzi. During these discussions, the strategic significance of Intuit’s artificial intelligence (AI)-powered expert platform was emphasized, particularly for its consumer and business applications.

Intuit has invested over five years in data and AI to create an ecosystem designed to provide "done-for-you" experiences, which has been instrumental in reinforcing its dominance in the lower-end market and facilitating its expansion into the mid-market segment. This strategy has contributed to the company’s impressive 79.8% gross profit margin and 13.7% revenue growth over the last twelve months. The company’s management underscored the growth potential in Assisted Tax and Information Exchange Services (IES) for mid-market clients as key components driving future progress.

The company’s leadership also reaffirmed its commitment to achieving double-digit revenue growth, margin expansion, and earnings per share (EPS) increasing at a faster rate than revenue. InvestingPro analysis reveals the company maintains a strong financial health score, though it currently trades at a relatively high P/E ratio of 54.7x. Discover 15+ additional exclusive insights and detailed financial metrics with an InvestingPro subscription, including the comprehensive Pro Research Report available for Intuit and 1,400+ other top stocks. This commitment was conveyed with a heightened level of confidence, according to the analyst’s observations.

Mizuho’s analysis further suggests that Intuit’s tax-related strategies are poised to yield positive results this year, particularly in the consumer segment. These strategies include targeted marketing for Assisted services, enhancing local expert visibility in search results, and a focus on capturing the lower-end market, which have already begun to show early positive signs.

The price target of $765 set by Mizuho is based on a sum-of-the-parts (SOTP) valuation method, which considers the value of each segment of Intuit’s diversified business operations. The reiteration of the Outperform rating reflects Mizuho’s positive outlook on Intuit’s strategic initiatives and their potential to continue driving the company’s financial performance. InvestingPro data shows the company has maintained consistent dividend payments for 15 consecutive years, with a 15.6% dividend growth in the last twelve months, demonstrating strong financial stability and shareholder commitment.

In other recent news, Intuit Inc. reported robust earnings that exceeded expectations, particularly in its Consumer Group revenue and online ecosystem. The company’s second-quarter performance saw a notable acceleration in online services revenue, with a 21% growth rate, and a 19% expansion in Online Services revenue. Analysts from Scotiabank (TSX:BNS) highlighted Intuit’s effective use of artificial intelligence, contributing to significant efficiencies and a 28% earnings per share (EPS) increase for the quarter. Intuit’s TurboTax franchise continues to perform strongly, with a positive outlook from KeyBanc, which maintained an Overweight rating and a $770 price target. Mizuho Securities also expressed optimism by raising its price target to $765, citing confidence in Intuit’s core products and potential growth from Credit Karma. Meanwhile, BMO Capital Markets adjusted its price target to $714, maintaining an Outperform rating due to Intuit’s solid fiscal performance and promising tax-related services. Stifel reiterated its Buy rating and a $725 price target, emphasizing Intuit’s resilience and potential for durable growth. These developments reflect a generally positive sentiment among analysts regarding Intuit’s financial prospects.

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