Shares of a financial management solutions provider, Intuit (NASDAQ:INTU), fell 4.8% in extended trading yesterday after the company posted mixed Q3FY23 results. Adjusted earnings of $8.92 per share grew 17% year-over-year and beat analyst estimates of $8.49 per share. However, sales grew 7% year-over-year to $6.02 billion, but marginally missed the consensus of $6.09 billion.
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In terms of outlook, the company increased its FY23 revenue projection, expecting it to increase by 12% to 13% annually and fall between $14.279 billion and $14.317 billion. Additionally, FY23 adjusted profits are expected to be between $14.20 and $14.25 per share, compared to the average consensus estimate of $13.83 per share.
However, Intuit’s fourth-quarter guidance fell short of expectations. Adjusted earnings are projected between $1.43 and $1.48 per share, versus the consensus of $1.50 per share.
Meanwhile, Q4 sales are expected to grow by 9% to 10%. Additionally, Intuit noted that Q4 sales will be impacted by a decline in tax filings in the Consumer Group. Meanwhile, the performance of Credit Karma, which gives out home loans, auto loans, etc., remains in jeopardy, driven by macro factors such as higher interest rates and inflation.
What is the Future of Intuit Stock?
Yesterday, Citi analyst Steve Enders reiterated a Buy rating on Intuit stock with a price target of $475, implying 5.6% upside potential. Enders is confident in Intuit’s ability to generate free cash flow and hence allocates a premium to the stock compared to peers.
On TipRanks, Intuit commands a Strong Buy consensus rating based on 14 Buys and two Holds. Also, the average Intuit price target of $494.25 implies 9.9% upside potential from current levels. At the same time, INTU stock has gained 15.4% so far this year.
