Categories Technology, Trending Stocks

Intuit (INTU) stock rebounds on bullish outlook after a 2-year low

Intuit Inc. (NASDAQ: INTU) stock rebounds on Tuesday after falling to a 2-year low of $187.68 on Monday. The shares have been hurt by the shift in the tax filing deadline by three months due to the rapid spread of the Covid-19 outbreak around the globe. The analysts remained bullish on the stock for the long term.

The Treasury Department and Internal Revenue Service announced that the federal income tax filing due date is automatically extended from April 15 to July 15, 2020. All taxpayers and businesses will have additional time to file and make payments without interest or penalties.

taxes
Image for representation. Courtesy: Kelly Sikkema on Unsplash

The market has been facing immense pressure from the coronavirus outbreak but the company continues to be well-positioned to handle the current macro-related circumstances. Historically, the company has performed well during economic downturns.

The consumer and small business spending is likely to be negatively impacted by the current adverse macroeconomic conditions. The company’s payments revenue will be hurt by reduced credit and debit card transaction processing volumes due to decreased consumer spending levels.

The delay in taxes will show a marginal reduction in the top line during the third quarter but will be recovered in the fourth quarter. This will drag the stock lower in the near-term but the strong free cash flow margin along with the potential acquisition of Credit Karma could drive sustained growth in the future.

In mid-February, Intuit agreed to buy Credit Karma for $7.1 billion in cash and stock. The deal is seen as a great strategic fit with Intuit could become better equipped to succeed than in the past. The merger offers synergy and will help reinvigorate growth.

For the second quarter, Intuit reported a 26% jump in earnings as growths in Small Business and Self-Employed Group and in Consumer Group drove the top line higher. Strong customer growth, coupled with higher prices and mix-shift, drove a 43% increase in QuickBooks online accounting revenue.

The market analysts were bullish on the stock with the majority recommended a “hold” rating with an average price target of $287.56. The stock is valued near the fair value with a 6% estimated return but the performance outlook is negative in the near-term and long-term. The shares opened higher and are trading in the green territory in the mid-afternoon on Tuesday. However, the stock is below the 50-day moving average of $272.29 and the 200-day moving average of $267.75.

Most Popular

AVGO Earnings: All you need to know about Broadcom Q1 2021 earnings results

Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared

Infographic: Costco (COST) Q2 2021 sales up 15%; earnings miss

Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million

Will shifting to as-a-service model help Hewlett Packard in emerging stronger from COVID?

With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top