Intuit Raises FY21 Sales Outlook After $7.1B Credit Karma Deal

Intuit Inc. updated its 2Q and fiscal 2021 outlook to reflect the completion of the Credit Karma acquisition. The financial accounting and tax preparation software maker had inked a deal in February to buy Credit Karma in a cash and stock deal worth $7.1 billion.

Intuit (INTU) expects Credit Karma to contribute $545-$580 million in revenues and $15-$35 million in operating income during fiscal 2021. Therefore, the company raised fiscal 2021 sales guidance range to $8.810-$8.995 billion from $8.265-$8.415 billion expected earlier.

However, the company lowered its non-GAAP earnings outlook to $8.20-$8.40 per share from the $8.40-$8.55 anticipated previously. (See INTU stock analysis on TipRanks)

For 2Q, Intuit forecasts revenues between $1.935 billion and $1.965 billion, translating into a year-over-year increase of 14%-16%, up from the previous projection of 8%-9% growth. Non-GAAP EPS guidance was lowered to $1.25-$1.31 from $1.31-$1.34 expected earlier.

Last month, Oppenheimer analyst Scott Schneeberger reiterated a Buy rating and the price target of $382 (2.6% upside potential) on the stock. In a note to investors, Schneeberger wrote, “We anticipate Intuit’s strong base business to be augmented by its pending Credit Karma acquisition on the strength/opportunity of the combined companies’ consumer finance platform.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 10 Buys and 1 Hold. The average price target stands at $402.18 and implies upside potential of about 8.1% to current levels. Shares have increased by 42.1% year-to-date.

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