"We see Intuit as a cycle-independent technology leader in the early stages of global expansion that will benefit from the shift to QuickBooks Online (QBO)," analysts said about the California-based provider of business and financial management solutions.
"However, we believe the company's targets for subscriber growth and earnings CAGR may prove somewhat ambitious, and expect some pressure on tax volumes based on the implementation of the ACA and new fraud-reduction measures by the IRS," they added.
Analysts lowered their estimate for FY16 EPS to $3.74 from $4 and introduced FY17 estimate of $4.60, below guidance for $5. While analysts see upside to FY15 EPS estimates, they believe investors will be more focused on QBO subscribers and feasibility of FY17 goals.
Shares of Intuit closed up 0.84% at $92.88 yesterday.
Separately, TheStreet Ratings team rates INTUIT INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTUIT INC (INTU) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, INTU's share price has jumped by 25.27%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, INTU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- INTU's revenue growth trails the industry average of 27.3%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- INTU's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to -$118.00 million or 37.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.86%.
- The gross profit margin for INTUIT INC is currently very high, coming in at 81.10%. Regardless of INTU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, INTU's net profit margin of -12.50% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: INTU Ratings Report