INTU
Intuit Inc
TMT, Finance/Real Estate
04/13/2022
Presented
| Date | 04/07/2022 |
| Price | $494.33 |
| Market Cap | $139.80B |
| Ent Value | $165.17B |
| P/E Ratio | 63.08x |
| Book Value | $55.11 |
| Div Yield | 0.51% |
| Shares O/S | 282.81M |
| Ave Daily Vol | 1,982,175 |
| Short Int | 0.96% |
Current
| Price | $617.89 |
| Market Cap | $173.19B |
| Intuit, Inc. engages in the provision of business and financial management solutions. It operates through the following segments: Small Business and Self-Employed, Consumer, Credit Karma, and ProConnect. The Small Business and Self-Employed segment offers QuickBooks financial and business management online services and desktop software, payroll solutions, payment processing solutions, and financing for small businesses. The Consumer segment includes do-it-yourself and assisted TurboTax income tax preparation products and services. The Credit Karma segment serves consumers with a personal finance platform that provides personalized recommendations of credit card, home, auto and personal loan, and insurance products, and online savings and checking accounts. The ProConnect segment serves professional accountants in the U.S. and Canada, who are essential to both small business success and tax preparation and filing. The company was founded by Scott D. Cook and Thomas A. Proulx in March 1983 and is headquartered in Mountain View, CA. |
Publicly traded companies mentioned herein: Intuit Inc (INTU)
Highlights
The presenter is long shares of Intuit Inc (INTU), which is best known for its QuickBooks, TurboTax, and Credit Karma brands. INTU is trading at $490 per share, down 22% YTD due to a miss on taxes in Q2’22 (ended Jan. 31) and overall market weakness, but he doesn’t think the weak tax results indicate a structural impairment to that business. Rather, it’s a timing difference and management has discussed consumer behavior shifting to filing later in the tax season, leading the presenter to expect an acceleration in the current quarter. Looking across the various business lines, he considers INTU a safe investment relative to other software stocks. QuickBooks has pricing power, is mission critical to businesses, and is performing solidly; TurboTax is accelerating; and Credit Karma is skewed towards credit cards which are typically more insulated from slowdowns in consumer credit compared to other loan offerings like mortgages and direct loans (i.e., as consumers start to draw down their savings, they tend to open new credit cards and draw on those cards), giving the presenter confidence in Credit Karma’s performance at least over the next couple of quarters. The company also has a strong FCF profile, with the Street forecasting $12.59 and $16.32 per share in FY2022 (ends July 31) and FY2023, respectively. The stock trades at 30x consensus 2023 FCF, and while he is unwilling to underwrite multiple expansion in the current market, his FCF forecast is 15% – 20% above the Street, creating sufficient upside given INTU’s relative safety.
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