The shares of Intuit (NASDAQ: INTU) faced selling pressure on Friday after the financial technology solutions provider issued a slightly weaker Q4 earnings outlook. The company’s fiscal 2023 third-quarter earnings and revenues, however, exceeded estimates. Notably, Intuit also revised its fiscal year 2024 projections upward guidance. The stock of Intuit, which has appreciated by 7.20% so far this year, ended Friday’s trading session at $606.99, down $55.27, or 8.35%, from the prior close.
The Mountain View company, headquartered in California, disclosed its third-quarter revenue figures of $6.74 billion, an increase of 11.80% from $6.02 billion in the comparable quarter of fiscal 2023.
At the conclusion of the third quarter, which ended April 30, 2024, Intuit recorded net income of $2.39 billion, or $8.42 per share, compared with $2.09 billion, or $7.38 per share, in the quarter that ended April 30, 2023.
Excluding amortization of acquired technology, amortization of other acquired intangible assets, share-based compensation expense, net (gain) loss on debt securities and other investments, loss on disposal of a business, and income tax effects and adjustments, among others, the 3Q 2024 non-GAAP net income was $2.80 billion, or $9.88 per share, up from $2.52 billion, or $8.92 per share, in 3Q 2023.
Analysts surveyed by LSEG had anticipated Intuit to post earnings of $9.37 per share on revenues of $6.647 billion.
Segment wise:
- Service revenues rose by 11.92% y-o-y to $6.05 billion.
- Product and other revenues were $689 million, up from $614 million last year.
By the nature of business:
- Consumer Group revenue grew 9% y-o-y to $3.7 billion. Specifically, TurboTax Live revenues jumped 17% y-o-y to $1.4 billion, mirroring roughly 30% of total Consumer Group revenue.
- Small Business and Self-Employed Group revenues were $2.40 billion, up 18% from last year. QuickBooks Online Accounting revenue surged 19% on a y-o-y basis.
- Credit Karma revenues increased by 8% y-o-y to $443 million.
- ProTax Group revenue rose by 3% y-o-y to $254 million.
The company ended Q3 2024 with a cash and investment balance of about $4.70 billion. Also, Intuit’s debt stood at $6 billion at the end of the third quarter.
During the quarter, Intuit repurchased $584 million worth of shares. Notably, the unfulfilled share repurchase authorization is $2.10 billion. Intuit’s Board has approved a quarterly dividend of $0.90 per share, reflecting a 15% rise from the same period last year, payable on July 18, 2024.
Looking ahead, the company projects Q4 revenues in the range of $3.063 billion to $3.099 billion, translating to a growth of roughly 13% to 14% from last year. Intuit also forecasts 4Q24 adjusted earnings of between $1.80 and $1.85 per share. Wall Street analysts anticipate Intuit to post earnings of $1.93 per share on revenues of $3.04 billion.
Intuit also stated that it expects FY 2024 revenues in the range of $16.164 billion to $16.20 billion, reflecting a growth of about 13%, an increase from the earlier growth guidance rate of 11% to 12%. The company also forecasts FY 2024 non-GAAP earnings per share of between $16.79 and $16.84, mirroring growth of about 17%, an increase from the prior growth guidance rate of 12% to 14%.
Analysts surveyed by the Street anticipate the company to record earnings of $16.41 per share on revenues of $16.05 billion.
The quarterly earnings beat and slightly weak FY 2024 earnings outlook are expected to keep Intuit’s stock range-bound in the near term.
The historical price chart indicates that the stock of Intuit is descending after facing resistance at $660. The next support is anticipated to be only near $560. Furthermore, the stock is currently trading under its 50-day moving average, with the MACD indicator indicating a negative reading. Therefore, we anticipate Intuit’s stock to remain in a downtrend in the near term.
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