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Can Intuit's Expanding AI-Focused Portfolio Push the Stock Higher?
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Intuit (INTU - Free Report) shares have declined 0.6% year to date (YTD), underperforming the broader Zacks Computer and Technology Sector’s appreciation of 23.7%.
Shares of PRGS, SSNC and TMICY have returned 24.1%, 21.5% and 11%, respectively, over the same time frame. The industry has appreciated 13.8% YTD.
Expanding AI-Driven Portfolio to Boost INTU’s Prospects
INTU recently announced improvements in its Generative AI operating system (GenOS) with the deployment of agentic AI features. These AI-driven features help offer enhanced personalization, security, usability and functionality across all major platforms.
INTU will focus on synergizing GenOS, language models, GenSRF, orchestrator and UX to provide an automated solution to its clients for practical application.
For consumers, it will integrate TurboTax and Credit Karma into a financial platform to provide year-round information and recommendations on tax, tax refund, adjustments in withholdings spending and debt.
For businesses, Intuit will integrate QuickBooks and Mailchimp to give business owners information on cash flow, invoices and marketing possibilities. Further, customers will be able to generate proposals, estimates and campaigns through Quickbooks and also utilize Mailchimp’s CRM.
The features are expected to be available in 2025.
INTU’s Gen AI Strength to Aid Prospects
Intuit enjoys first mover advantage due to its aggressive investment in AI capabilities, including machine learning, knowledge engineering and GenAI.
It has made investments to digitalize all financial processes for businesses and individual consumers to streamline operations, making financial tasks less time-consuming and more efficient.
For instance, Intuit Assist, which delivers personalized financial insights using data and AI, was launched in 2023 and has more than 1 million users. Turbotax Live is its latest development that will provide individual taxpayers with tax completion and solution in less than 30 minutes by leveraging data integration across all platforms.
Intuit’s Enterprise Suite is suitable for larger entities and is a configurable solution for multi-entity businesses that focuses on financial management, human resources, marketing, profitability and other complex business functions.
Intuit expects investment In AI to enhance market penetration in manual, overpriced and disaggregated assisted categories.
However, higher costs and expenses due to increased investments in marketing and engineering teams are likely to negatively impact bottom-line results in the near term. Selling and marketing expenses increased 14% over fiscal 2023 to $4.31 billion.
INTU’s balance sheet is highly leveraged. Debt amounted to $6 billion, and cash and cash equivalent was $3.6 billion as of July 31, 2024.
INTU’s Guidance Positive for Fiscal 2025
Intuit projects fiscal 2025 revenues in the band of $18.16 - $18.34 billion, indicating 12-13% growth. In fiscal 2024, Intuit generated total revenues of $16.3 billion.
The company anticipates non-GAAP operating income between $7.24 billion and $7.31 billion.
Intuit expects fiscal 2024 non-GAAP earnings between $19.16 per share and $19.36 per share.
For the fiscal first quarter of 2025, INTU expects revenues to grow between 5% and 6% on a year-over-year basis.
Non-GAAP earnings for the quarter are estimated in the range of $2.33 - $2.38 per share.
What Should Investors Do With INTU Stock?
INTU shares are currently overvalued, as suggested by a Value Score of D.
In terms of the forward 12-month Price/Earnings ratio, Intuit is trading at 31.39X, higher than the Zacks Computer & Technology sector’s 26.68X.
Intuit currently has a Zacks Rank #3 (Hold), which implies that investors may want to wait for a more favorable entry point.
Image: Bigstock
Can Intuit's Expanding AI-Focused Portfolio Push the Stock Higher?
Intuit (INTU - Free Report) shares have declined 0.6% year to date (YTD), underperforming the broader Zacks Computer and Technology Sector’s appreciation of 23.7%.
It has also lagged the Zacks Computer Software Industry and peers like Progress Software (PRGS - Free Report) , SS&C Technologies (SSNC - Free Report) and Trend Micro (TMICY - Free Report) .
Shares of PRGS, SSNC and TMICY have returned 24.1%, 21.5% and 11%, respectively, over the same time frame. The industry has appreciated 13.8% YTD.
Expanding AI-Driven Portfolio to Boost INTU’s Prospects
INTU recently announced improvements in its Generative AI operating system (GenOS) with the deployment of agentic AI features. These AI-driven features help offer enhanced personalization, security, usability and functionality across all major platforms.
Intuit Inc. Price and Consensus
Intuit Inc. price-consensus-chart | Intuit Inc. Quote
INTU will focus on synergizing GenOS, language models, GenSRF, orchestrator and UX to provide an automated solution to its clients for practical application.
For consumers, it will integrate TurboTax and Credit Karma into a financial platform to provide year-round information and recommendations on tax, tax refund, adjustments in withholdings spending and debt.
For businesses, Intuit will integrate QuickBooks and Mailchimp to give business owners information on cash flow, invoices and marketing possibilities. Further, customers will be able to generate proposals, estimates and campaigns through Quickbooks and also utilize Mailchimp’s CRM.
The features are expected to be available in 2025.
INTU’s Gen AI Strength to Aid Prospects
Intuit enjoys first mover advantage due to its aggressive investment in AI capabilities, including machine learning, knowledge engineering and GenAI.
It has made investments to digitalize all financial processes for businesses and individual consumers to streamline operations, making financial tasks less time-consuming and more efficient.
For instance, Intuit Assist, which delivers personalized financial insights using data and AI, was launched in 2023 and has more than 1 million users. Turbotax Live is its latest development that will provide individual taxpayers with tax completion and solution in less than 30 minutes by leveraging data integration across all platforms.
Intuit’s Enterprise Suite is suitable for larger entities and is a configurable solution for multi-entity businesses that focuses on financial management, human resources, marketing, profitability and other complex business functions.
Intuit expects investment In AI to enhance market penetration in manual, overpriced and disaggregated assisted categories.
However, higher costs and expenses due to increased investments in marketing and engineering teams are likely to negatively impact bottom-line results in the near term. Selling and marketing expenses increased 14% over fiscal 2023 to $4.31 billion.
INTU’s balance sheet is highly leveraged. Debt amounted to $6 billion, and cash and cash equivalent was $3.6 billion as of July 31, 2024.
INTU’s Guidance Positive for Fiscal 2025
Intuit projects fiscal 2025 revenues in the band of $18.16 - $18.34 billion, indicating 12-13% growth. In fiscal 2024, Intuit generated total revenues of $16.3 billion.
The company anticipates non-GAAP operating income between $7.24 billion and $7.31 billion.
Intuit expects fiscal 2024 non-GAAP earnings between $19.16 per share and $19.36 per share.
For the fiscal first quarter of 2025, INTU expects revenues to grow between 5% and 6% on a year-over-year basis.
Non-GAAP earnings for the quarter are estimated in the range of $2.33 - $2.38 per share.
What Should Investors Do With INTU Stock?
INTU shares are currently overvalued, as suggested by a Value Score of D.
In terms of the forward 12-month Price/Earnings ratio, Intuit is trading at 31.39X, higher than the Zacks Computer & Technology sector’s 26.68X.
Intuit currently has a Zacks Rank #3 (Hold), which implies that investors may want to wait for a more favorable entry point.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.