Intuit: High-Teens EPS Growth Expected In FY23 Despite Worsening Macro In Q1

(Preview) Company Update (INTU US) (Buy)

Summary

• Intuit shares rose 9.6% in the two days since results, helped by dovish Fed comments, but are still cheap at 35x FY22 Non-GAAP EPS.

• The core SBSE segment grew revenues by 19% organically year-on-year, and is still expected to grow by 19-20% for the full year.

• Credit Karma is negatively impacted by financial firms tightening lending criteria, and Mailchimp revenues were flat sequentially.

• Full-year outlook for revenue growth in other segments is unchanged, and Non-GAAP EPS growth is still expected to be 15-17%.

• With shares at $416.07, we expect a total return of 85% (19.8% annualized) by July 2026, in just under 4 years. Buy.

Introduction

Intuit Inc. released Q1 FY23 results after markets closed on Tuesday (November 29), and its shares rose 9.6% in the subsequent two days, helped by a broad market rally after dovish comments by Fed chairman Jay Powell.

We initiated our Buy rating on Intuit in September 2019. Shares have since gained 58% (including dividends) in just over three years, t…