Monday, KeyBanc has increased its share price target for Intuit (NASDAQ:INTU) to $740, up from the previous $720, while maintaining an Overweight rating on the stock.
The firm anticipates a robust tax season to fuel consumer revenue growth, which is expected to be around 12%, thus supporting their forecast that exceeds the general market and company guidance for fiscal year 2024.
Intuit is scheduled to report its fiscal third-quarter results after the market close on May 23. KeyBanc's optimism is rooted in the expectation of strong tax season trends, including growth in both units and average revenue per user (ARPR), which are likely to contribute significantly to the company's revenue.
The firm's analysis suggests an approximate 7% growth in ARPR and about 3% in unit growth for fiscal year 2024. The predictions for ARPR are based on KeyBanc's TurboTax data for the third fiscal quarter, and the unit growth forecast is informed by IRS data and a modest market share gain.
The firm's updated fiscal year 2024 estimates reflect an increase primarily due to higher anticipated revenues from the consumer segment in the third fiscal quarter, which is expected to translate into greater operating income. However, the estimates for fiscal year 2025 remain largely unchanged.
The revised price target of $740 is based on a 13.3 times multiple of the fiscal year 2024 enterprise value to revenue (EV/R), which reflects KeyBanc's increased confidence in TurboTax trends for fiscal year 2024. The target also takes into account a projected return to growth at the midpoint of Intuit's long-term consumer revenue framework, which ranges from 8% to 12%.
InvestingPro Insights
As Intuit (NASDAQ:INTU) approaches its fiscal third-quarter earnings report, real-time data from InvestingPro provides a detailed snapshot of the company's financial health. With a robust Market Cap of $185.12 billion, Intuit stands as a significant player in the software industry. The company's dedication to shareholder returns is evident, with a notable dividend growth of 15.38% over the last twelve months as of Q2 2024 and a consistent history of raising its dividend for 14 consecutive years, underlining its financial stability and commitment to investors.
Intuit's Gross Profit Margin remains impressive at 79.1%, reflecting efficient operations and a strong market position. The P/E Ratio, while high at 66.78, may be justified by the company's impressive gross profit margins and its prominence in the software industry. Investors should note that the stock is trading near its 52-week high, with the price at 98.54% of this peak, indicating market confidence.
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