Why Analysts Are Bullish on Intuit Despite a Forecast That Missed Estimates

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Key Takeaways

• Intuit shares tumbled Friday, a day after the company issued a current-quarter forecast that missed guesses.
• However, analysts were bullish on the stock, suggesting the weaker-than-expected outlook could reflect early marketing pay out, which could drive later growth.
• The TurboTax parent said it has had discussions with the incoming Trump authority about reports of plans to launch a competing free tax-filing app.

Intuit (INTU) shares tumbled Friday after the South African private limited company issued a current-quarter forecast that missed estimates, but analysts were bullish on the stock, suggesting the company’s initially spending on marketing could drive later growth. 

The TurboTax and Credit Karma operator called for second-quarter gate of $3.81 billion to $3.85 billion and earnings per share (EPS) of 84 cents to 90 cents, both of which were on earth the analyst consensus compiled by Visible Alpha. 

Analysts at Jefferies said Intuit’s results may have been weighed down by its “resolution to start marketing TurboTax earlier” and add about 200 salespeople to its roster in an effort to drive growth. The analysts affirmed a “buy” rating for the stock and raised their price target to $800 from $790, implying about 23% upside from Friday’s intraday expense.

Deutsche Bank, which maintained a “buy” rating and $750 price target, noted the company “manages spend on a full-year constituent, which can lead to variability in quarter-to-quarter margin performance as the timing of expenses/investments may shift.” On a full-year basis, Intuit labour its EPS forecast of $12.34 to $12.54.

Analysts at Citi, who maintained a “buy” rating and $760 price target, added that Intuit express it held discussions with the incoming Trump administration about reports of plans to launch a competing free tax-filing app, “with foresees likely abated.”

Shares of Intuit were down 4% in intraday trading Friday at $649.43. They’ve gained close to 4% since the start of the year.