Intuit (INTU) reiterates its outlook for Q1 and FY22 ahead of Investor Day – October 1, 2021

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Intuit (INTU Free Report) reiterated its outlook for the first quarter and full year 2022 ahead of the Virtual Investor Day presentation on September 30.

For the first fiscal quarter, Intuit continues to expect revenue growth of between 36% and 38% year-over-year. The company also reaffirmed its forecast range for GAAP and non-GAAP earnings per share of 14 to 19 cents and 94 to 99 cents, respectively.

For fiscal 2022, this business and financial management solutions provider continues to project revenues in the $ 11.05 billion to $ 11.20 billion range, calling for year-over-year growth of $ 15-16 billion. %. Notably, the main expectations for both periods, i.e. first quarter and fiscal 2022, include contributions to income from the recently acquired Credit Karma business.

Operating income on a GAAP and non-GAAP basis for fiscal 2022 is expected to be between $ 2.605-2.680 billion and $ 4.050-4.125 billion, respectively. GAAP earnings per share are expected to be between $ 7.46 and $ 7.66. Non-GAAP earnings are still projected to be between $ 11.05 and $ 11.25 per share, indicating a 13-16% increase year over year.

Intuit expects revenue growth across all lines of business in fiscal 2022. Sales of its Small Business and Self-Employed Groups division are expected to increase in the 12-14% range, while the business unit of the consumer group is expected to grow by 10-11%. , Year after year.

Its ProConnect group’s revenue is expected to grow 1-2% year-over-year. Additionally, the newly acquired Credit Karma business is expected to generate revenues of between $ 1.345 billion and $ 1.380 billion in fiscal 2022.

Intuit is benefiting from the strong revenue momentum of its online ecosystem, aided by an expanding subscriber base for Quickbooks Online. Notably, the company’s total online ecosystem revenue grew 30% year-over-year to $ 770 million in the fourth quarter of fiscal 2021. QuickBooks online accounting revenue increased by 28%. % year-on-year. Revenues from online services, which include payroll, payments, time tracking and capital, have increased 35% year over year.

Additionally, Intuit had reported exceptional results for the fourth quarter of fiscal 2021, with revenue and adjusted earnings per share up 41% and 9%, respectively, year-over-year. The year-over-year increases in net results reflect healthy growth in the DIY category as well as a strong contribution to revenue from the Credit Karma business. Credit Karma contributed $ 405 million to the company’s total quarterly revenues.

Nonetheless, Intuit’s near-term outlook looks grim as the global lockdown amid the coronavirus crisis has affected small businesses, posing risks to its revenue growth. Small businesses are pushing back their payroll investments due to global economic and trade uncertainties brought on by the pandemic.

In addition, increased costs and expenses due to increased investments in the marketing and engineering teams are expected to continue to impact the short-term bottom line of the business. The costs associated with acquiring Credit Karma could further increase expenses.

Zacks rank and actions to consider

Currently, Intuit carries a Zacks Rank # 5 (strong sell).

Top ranked stocks in the broader tech sector include Microsoft (MSFT Free report), STMicroelectronics SA (STM Free report), and NVIDIA Corporation (NVDA Free Report), all of which have a Zacks Rank of 2 (Buy), at the moment. You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

The long-term profit growth rate for Microsoft, STMicroelectronics and NVIDIA is currently set at 11.1%, 5% and 19.5%, respectively.


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