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On Monday, Stifel analysts maintained a positive outlook on Intuit shares (NASDAQ:INTU), reiterating a Buy rating and a $725.00 price target. Currently trading at $670.28, the software giant commands a market capitalization of $187.38 billion and trades near its 52-week high of $714.78. According to InvestingPro analysis, the stock is currently trading close to its Fair Value. The firm’s analysts highlighted the stronger-than-expected growth in cumulative year-over-year IRS filing towards the end of the tax season and into the end of April. This, combined with solid Average Revenue Per User (ARPU) growth and a conservative third-quarter guidance from Intuit’s management, is expected to yield results above Stifel’s initial estimate of approximately 9% growth in the Consumer segment for the third quarter of fiscal year 2025. The company has demonstrated strong execution with impressive revenue growth of 13.73% and industry-leading gross profit margins of 79.82%. With earnings scheduled for May 22, InvestingPro subscribers can access 17 additional key insights about Intuit’s financial performance and valuation metrics.
The analysts also anticipate that stable employment data and pricing advantages, along with ARPU growth driven by enhanced functionality and increased penetration of Payroll and Payment solutions in Intuit’s Enterprise Solutions (IES) and QuickBooks Online Accountant (QBOA), will balance out the pricing challenges faced by Mailchimp.
Despite fiscal year 2025 being a transition period as Intuit continues its aggressive expansion in the Global Business Services (GBS) market, Stifel’s team believes that the company has several levers to pull, such as pricing strategies, partnerships, and IES/QBOA, to maintain a low-teens revenue growth rate in the near term. The analysts also noted Intuit’s ongoing progress in other initiatives, including Intuit Live and genAI, which are expected to contribute to the company’s growth trajectory. InvestingPro’s comprehensive analysis indicates the company maintains GREAT financial health, with strong profitability and growth metrics. Discover the complete financial story in InvestingPro’s detailed Research Report, part of their coverage of over 1,400 top US stocks.
Stifel’s commentary comes as Intuit adapts its go-to-market strategies, taking into account the impacts of these changes on its business operations. The company’s strategic initiatives are aimed at leveraging technology and partnerships to enhance product offerings and customer experience, positioning Intuit for sustained growth in the evolving financial software market.
In other recent news, Intuit has made several key announcements and received updates from analysts that may interest investors. Goldman Sachs has reiterated its Buy rating for Intuit, setting a price target of $750. The firm anticipates Intuit’s revenue and consumer growth will exceed market expectations, with a projected 13% increase in revenue for the upcoming fiscal quarter. S&P Global Ratings has upgraded Intuit’s outlook from stable to positive, citing strong revenue and EBITDA growth, particularly in its Credit Karma and QuickBooks segments. Intuit is expected to maintain a low leverage ratio, which could lead to a ratings upgrade in the future.
In a strategic move, Intuit announced plans to acquire GoCo, an HR software provider, to enhance its Human Capital Management offerings. This acquisition is expected to be finalized in the fourth quarter of fiscal year 2025, though financial terms have not been disclosed. The Trump administration’s decision to phase out the IRS Direct File program could potentially benefit Intuit by increasing the number of users turning to its tax preparation software, TurboTax.
KeyBanc Capital Markets has maintained its Overweight rating on Intuit, with a price target of $770, highlighting an increase in Average Revenue Per Transaction (JO:NTUJ) growth. They have noted a positive shift towards larger transactions within TurboTax Live, despite a slow start to the tax season. These developments reflect a positive outlook on Intuit’s revenue growth for fiscal year 2025, driven by its strategic initiatives and robust product offerings.
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