Intuit: With Strong Q3, New FY21 Guidance Gives 19% EPS Growth (Preview)

Company Update (INTU US) (Buy)

Summary

• Intuit reported Q3 FY21 results on Tuesday evening, again providing evidence that our investment case is on track.

• EPS is 13% higher than before in the new FY21 guidance, supported by double-digit revenue growth in Intuit's two core segments.

• In Q3, Small Business & Self-Employed saw revenue growth accelerated to 20%, and synergies from Credit Karma started to materialize.

• Consumer revenues are expected to grow 11-12% in FY21, supported by a 6% unit growth, with a 1 ppt share gain in a growing market.

• With shares at $442.81, we expect an exit price of $614 and a total return of 37% (11.5% annualized) by July 2024. Buy.

Introduction

We review our investment case on Intuit Inc. after Q3 FY21 results (for February-April 2021) were released after markets closed on Tuesday (May 25). Intuit shares closed 0.9% higher on Wednesday at $442.81, less than 1% below their 52-week high ($445.66).

We initiated our Buy rating on Intuit stock in September 2019. Since then shares have returned nearly 6…