Intuit INTU
What does Intuit do?
Intuit is a US software provider for financial and tax management, addressing individuals as well as small and mid-sized businesses. The business is divided into the Global Business Solutions and Consumer segments. The first segment includes QuickBooks, with accounting, payroll, payment processing and financing offerings, as well as the marketing platform Mailchimp.
The Consumer segment comprises TurboTax for tax returns, either self-prepared or with professional assistance, and Credit Karma, a platform for credit comparisons and financial recommendations. Revenue arises from subscriptions, transaction fees, referral commissions and interest income. In competition, Intuit benefits from well-known brands, a large installed user base and the integration of its products into an ecosystem. Depending on the segment, competitors include Xero, Sage, H&R Block, payment service providers and marketing software vendors, as well as other financial platforms.
Score profile
Rank vs. Software - Application (71 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Intuit ranks above average in the group Software - Application (7.1/10). On growth, the company ranks in the middle in the group Software - Application (4.3/10). On valuation (higher = cheaper), the stock ranks above average in the group Software - Application (6.5/10). On financial strength, Intuit ranks above average in the group Software - Application (6.1/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 12.6x | 18.0x | better than 72 % |
| Trailing P/E | 20.7x | 32.7x | better than 72 % |
| PEG ratio | 1.1x | 1.4x | better than 61 % |
| EV/EBITDA | 13.4x | 19.7x | better than 75 % |
| Price/sales | 4.2x | 4.4x | better than 52 % |
| Price/book | 4.8x | 5.5x | better than 57 % |
| Revenue growth | 13.7% | 10.8% | better than 65 % |
| Earnings growth | -1.4% | 9.4% | better than 21 % |
| Gross margin | 81.0% | 71.8% | better than 77 % |
| Operating margin | 17.6% | 15.7% | better than 61 % |
| Net margin | 21.3% | 12.3% | better than 77 % |
| Return on equity | 23.6% | 13.2% | better than 68 % |
| Debt/equity | 44.3% | 46.9% | better than 51 % |
| Current ratio | 1.5x | 1.2x | better than 62 % |
| Free cash flow yield | 7.0% | 5.3% | better than 72 % |
| Dividend yield | 1.6% | 1.1% | – |
| Payout ratio | 29.2% | 31.2% | – |
| Beta | 0.92 | 0.96 | – |
Valuation: what is Intuit worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Intuit a model range of 483.46 USD to 682.21 USD per share.
31 analysts, average rating “Buy”, average price target 407.76 USD (+19.8%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Recurring subscription and cloud revenue at QuickBooks provides predictable income and high customer retention.
- The number of small businesses and their willingness to use payment, payroll and financing services via the platform drive growth.
- Seasonal tax filings by individuals, as well as advertising and referral revenue at Credit Karma, shape the Consumer business.
Risks
- Free government or private tax solutions, as well as regulatory intervention, may put pressure on the TurboTax business.
- Economic weakness hits small businesses, reduces transaction volumes and increases credit losses in financing offerings and the referral business.
- Rapid advances in artificial intelligence may strengthen competitors or devalue existing software offerings and pricing models.
What to look for with Intuit
Growth in recurring revenue per customer is informative because it directly reflects pricing power, customer retention and the success of the platform approach.