Intuit: Strong FY21 Results Took Shares To 60x P/E (Preview)

Company Update (INTU US) (Buy)

Summary

• Intuit shares continue to be a multi-year compounder, more than doubling in the 2 years since our Buy rating and gaining 49% year to date.

• FY21 results last week saw low-teens revenue growth in Intuit's two core segments, while newly acquired Credit Karma reached new records.

• FY22 guidance implies another year of double-digit revenue growth, though GAAP EBIT and EPS growth will be lower due to investments.

• Intuit stock is now trading at nearly 60x FY21 EPS and has a P/E of just over 50x based on FY22 EPS guidance.

• With shares at $565.94, we expect a total return of 24% (7.2% annualized) by July 2025, still an attractive risk/reward. Buy.

Introduction

We review our investment case on Intuit Inc. after Q4 FY21 results were released last Tuesday (August 24).

We initiated our Buy rating on Intuit in September 2019. Since then, INTU shares have generated a gain of 112% (with dividends) in just under 2 years, including a gain of 49% year-to-date.

Intuit has continued to progress operationall…