Intuit: Down 7.5% After Q3 FY23 Results, Despite Raised Guidance

Company Update (INTU US) (Buy)

Highlights

• Intuit is one of the fastest-growing and most resilient businesses

• Q3 FY23 was another strong quarter, with EBIT growing 16%

• A strong SBSE more than offset temporary weakness elsewhere

• Non-GAAP P/E is 30x, FCF Yield is 2.0%, Dividend Yield is 0.8%

• At $415.92, we see 48% upside (13.8% p.a.) by July 2026. Buy

Introduction

Intuit shares fell 7.5% on Wednesday (May 24) after the company released Q3 FY23 results the evening before.

Q3 FY23 results were strong in aggregate. EBIT grew by 16% year-on-year in both GAAP and Non-GAAP terms. Good cost control helped margin expand significantly, and Non-GAAP EPS is now up 18.4% year-to-date. Small Business & Self-Employed revenues grew 21.2%, more than offsetting weak growth in Consumer and a decline in Credit Karma. The latter two were impacted by external factors – the number of tax filings has normalized downwards after COVID-19, and higher interest rates have reduced the volume of lending products.

Full-year guidance for the group was raise…