Jefferies analyst Brent Thill assigned a Street-high price target to Intuit (NASDAQ:INTU) stock after the software company posted solid beat-and-raise results for Q3. Thill reiterated a Buy rating while raising the price target to $770 from $760, implying 26.9% upside potential from current levels.
Intuit is an American multinational company that provides financial management solutions and compliance products and services to small businesses, accountants, and individuals. Over 50% of Intuit’s revenues are contributed by Small Business & Self-employed consumers. Despite the strong results, Intuit shares fell in after-hours trading on May 23 due to concerns about a soft Fiscal Q4 earnings outlook. The stock was trending down by 8.4% in early morning trade on May 27.
In the third quarter of Fiscal 2024, Intuit’s adjusted earnings per share (EPS) rose 10.7% year-over-year to $9.88, while revenue jumped nearly 12% to $6.74 billion. At the same time, Intuit raised its full-year guidance for revenue and EPS owing to continued business momentum.
Jefferies’ Take on Intuit’s Results
Jefferies analyst believes that the initial share slide following the results is a temporary reaction to certain factors. These include tax unit share loss, small business’ online revenue missed expectations while desktop business exceeded consensus, and talks of elevated investments, which some presume could hurt Intuit’s margins.
Interestingly, Thill has solid conviction in Intuit’s fundamentals, which was demonstrated by a higher share in value-assisted tax (TurboTax Live revenue expected to grow by 17% in FY24), small business growing at double-digit (18% year-over-year in Q3) despite macro challenges, and the fact that the company’s desktop business includes large, lucrative clients.
Moreover, Thill is encouraged that Intuit’s revised guidance for FY24 is higher than the consensus on all counts. Meanwhile, Intuit’s Board also approved a $0.90 per share dividend, up 15% compared to the same period last year. Also, Intuit has $2.1 billion remaining under its current share buyback plan, after repurchasing $584 million worth of shares in Q3.
Intuit Website Traffic Showed Positive Trend
A look at Intuit’s website traffic year-over-year trends for Q3 FY24 showed a good jump in the reported quarter for overall visits. For Q3 FY24, the total estimated visits to all domains for Intuit rose by 8.42%, with desktop showing an 18.1% growth and Mobile showing a 1.4% decline.
What is the Future of Intuit Stock?
Despite the negative stock price reaction to the Q3 print, Wall Street remains highly optimistic about Intuit’s stock trajectory. On TipRanks, INTU stock has a Strong Buy consensus rating based on 17 Buys and two Hold ratings. The average Intuit price target of $720.47 implies 18.7% upside potential from current levels. This share price appreciation potential is over and above the 49.5% gain already registered in the past year.
Ending Notes
Intuit stock analysis shows that analysts are bullish about the stock’s long-term trajectory. Importantly, Jefferies analyst Brent Thill sees high stock price growth in the coming months. Thill’s views on Intuit’s proven business model, the potential for rapid growth in the Small business segment, and increasing TAM (total addressable market) opportunities from Live expert-assisted products, consistent execution, solid financials, and shareholder-friendly policies bode well for INTU stock.
