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Intuit (INTU) to Report Q3 Earnings: What's in the Offing?

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Intuit Inc. (INTU - Free Report) is slated to release third-quarter 2021 results on May 25.

Notably, the company recently lowered its third-quarter fiscal 2021 outlook to reflect the extension of the tax filing deadline from Apr 15 to May 17, leading to a revenue shift. Notably, the Internal Revenue Service (IRS) extended the deadline to help taxpayers navigate the unusual circumstances related to the pandemic.

For the third quarter, Intuit now projects revenues between $4.165 billion and $4.170 billion, significantly down from the prior projection of $4.605-$4.655 billion. The Zacks Consensus Estimate for revenues is pegged at $4.37 billion, indicating year-over-year growth of 45.41%.

On a non-GAAP basis, Intuit now anticipates reporting earnings per share (EPS) of $6-$6.5. Previously, it had forecasted EPS in a band of $6.75-$6.85. The consensus mark for earnings is pegged at $6.04 per share, suggesting growth of 34.52% from the year-ago quarter’s earnings.

Intuit’s earnings beat estimates in the trailing four quarters, the average surprise being 49.73%.

Let’s see how things have shaped up prior to the upcoming announcement.

Intuit Inc. Price and EPS Surprise

Intuit Inc. Price and EPS Surprise

Intuit Inc. price-eps-surprise | Intuit Inc. Quote

Factors to Consider

Intuit’s top line is likely to have been driven by solid growth in the Online Ecosystem, aided by an expanding subscriber base for Quickbooks Online.

Notably, the Zacks Consensus Estimate for total Online Ecosystem revenues is pegged at $690 million for the quarter under review, indicating a 23.2% increase from the prior-year quarter’s reported figure. The consensus mark for Quickbooks Online’s revenues is pinned at $425 million, suggesting a 20.4% improvement year on year.

Furthermore, growth in the TurboTax Live offering is likely to have been accretive to the Consumer tax business during the fiscal first quarter, driven by growing customer engagement. The Zacks Consensus Estimate for revenues of $2.84 billion from the Consumer tax business calls for growth of 55.2% year over year.

Solid momentum of the company’s leading product, QuickBooks Capital, is a positive as well.

Moreover, gradual recovery in the Small Business and Self-Employed segment is likely to have been a tailwind to the top line in the quarter under review. Notably, the Zacks Consensus Estimate for Small Business revenues in the quarter stands at $1.13 billion, which indicates a 14.6% year-over-year increase.

Improving customer retention rates are also expected to have been a positive during the third quarter.

Nonetheless, management expects its Desktop Ecosystem to display a gradual decline.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Intuit this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Intuit currently has a Zacks Rank of 3 and an Earnings ESP of 0.00%.

Stocks with Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Digital Turbine, Inc. (APPS - Free Report) has an Earnings ESP of +6.98 and currently, a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA Corp. (NVDA - Free Report) has an Earnings ESP of +1.96% and a Zacks Rank #2, at present.

Pure Storage, Inc. (PSTG - Free Report) has an Earnings ESP of +10.81% and currently, a Zacks Rank #3.

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