On Wednesday, BMO Capital maintained a positive outlook on shares of Intuit (NASDAQ:INTU), reiterating an Outperform rating and a price target of $700.00. The firm's perspective is buoyed by expectations of modest revenue growth in the Small Business and Credit Karma segments, which are projected to bolster the company's performance in what is typically a seasonally slower fourth quarter.
The analyst from BMO Capital highlighted that despite the general uncertainty surrounding software industry results as the year draws to a close, Intuit's fiscal year 2025 estimates appear robust. These projections include a year-over-year revenue increase of approximately 12% and earnings per share (EPS) growth of 13% to $19.10. These figures reflect the impact of price adjustments in the Small Business sector and the benefits of prior restructuring efforts.
Intuit is recognized for its strong foundational business and the potential for further growth through the application of artificial intelligence (AI) and machine learning (ML) across its product range. BMO Capital's stance suggests confidence in the company's long-term prospects, underlining the reasons for maintaining both the Outperform rating and the $700 price target.
The forecast for Intuit's future performance takes into account the company's strategic initiatives, including pricing strategies and structural changes, which are expected to drive revenue and EPS growth. BMO Capital's reaffirmed rating and price target indicate a belief in Intuit's ability to navigate the market and capitalize on technological advancements in AI and ML to enhance its offerings.
In other recent news, Morgan Stanley has adjusted its stance on Intuit, downgrading its rating from Overweight to Equalweight and reducing the price target to $685 from $750. The financial institution expressed concerns over Intuit's growth sustainability due to its recent strategic shifts, transitioning from a focus on unit growth to prioritizing pricing and revenue per customer.
The firm suggests that this strategy might be contributing to market share losses in its TurboTax product and could introduce risks to QuickBooks, potentially affecting the long-term growth trajectory of the company.
In related developments, Intapp, Inc. recently reported fourth-quarter results that exceeded analyst expectations and issued a strong outlook. The company posted adjusted earnings per share of $0.15 for the quarter ended June 30, surpassing the consensus estimate of $0.12.
Revenue rose 21% year-over-year to $114.4 million, exceeding analysts' projections of $111.58 million. For the first quarter of fiscal 2025, Intapp forecasts adjusted EPS of $0.12 to $0.14 on revenue between $117.2 million and $118.2 million. Looking ahead, Intapp projected full-year fiscal 2025 adjusted EPS of $0.59 to $0.63 on revenue of $493 million to $497 million.
InvestingPro Insights
InvestingPro data provides a comprehensive view of Intuit's financial health and market performance, which complements the positive outlook from BMO Capital. With a substantial market capitalization of $176.18 billion and a robust gross profit margin of 79.49% over the last twelve months as of Q3 2024, Intuit stands out as a significant player in the software industry. These figures underscore the company's ability to generate revenue efficiently, aligning with BMO Capital's expectation of revenue growth in its various segments.
While Intuit's P/E ratio of 57.21 indicates a high earnings multiple, this should be considered in the context of the company's impressive gross profit margins and consistent revenue growth, which was 12.39% over the last twelve months as of Q3 2024. Moreover, the company's commitment to shareholder returns is reflected in its consistent dividend payments over the past 14 years, with a recent dividend growth of 15.38%. This track record of financial discipline and shareholder value creation is a testament to Intuit's strategic initiatives and market positioning.
With two InvestingPro Tips highlighting Intuit's impressive gross profit margins and its status as a prominent player in the software industry, investors can gain further insights into the company's strengths. For those seeking a deeper analysis, additional tips are available on InvestingPro, including information on Intuit's debt levels and valuation multiples.
Intuit's strategic focus on AI and ML, as noted by BMO Capital, is likely to continue driving its long-term growth, a sentiment echoed by the InvestingPro data which shows a strong return over the last five years. The combination of Intuit's financial metrics and InvestingPro Tips offers investors a well-rounded perspective on the company's potential for sustained performance in the market.
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