Piper Sandler adjusted its price target on shares of Intuit (NASDAQ:INTU), increasing it to $768 from the previous $760, while retaining an Overweight rating on the stock. The adjustment follows Intuit's fourth-quarter results, which surpassed consensus expectations. Intuit reported revenues of approximately $3.18 billion, around $100 million above the consensus, and earnings per share (EPS) of $1.99, which was $0.14 higher than expected.
The company's Small Business and Self-Employed segment, which accounts for about 80% of its fourth-quarter revenues, showed an acceleration in growth to 20% from the previous 18%.
This growth is attributed to Intuit's efforts to enhance its clients' businesses by enabling them to increase their revenues and cash flow. Piper Sandler also noted that Intuit's initial Fiscal Year 2025 guidance was set ahead of consensus estimates.
While Intuit is implementing artificial intelligence (AI) both internally and with its clients, the revenue impact from AI is expected to be negligible this year. However, AI is anticipated to become a significant growth driver in future years.
Looking ahead, Piper Sandler pointed to the upcoming Analyst Day on September 26 as the next potential catalyst for the stock. The firm reiterated its Overweight rating and raised its price target to reflect the positive outlook on Intuit's performance and future prospects.
Recently, Intuit Inc (NASDAQ:INTU). reported a 13% revenue growth for the fourth quarter and fiscal year 2024. The company also forecasts a 12% to 13% revenue growth for fiscal year 2025, driven by a strategic focus on an AI-driven expert platform and the pursuit of five Big Bets, including expansion into the mid-market segment.
However, changes to the desktop ecosystem are projected to result in a $160 million revenue decrease in Q1 fiscal year 2025.
BMO Capital Markets updated its outlook on Intuit shares, increasing the price target to $760 from the previous $700, maintaining an Outperform rating. This adjustment follows Intuit's announcement of its fiscal year 2025 guidance, highlighting expected low-teens revenue and EPS growth.
Despite a decrease in cash reserves by 6-7% compared to the previous year, Intuit's cash and investment reserves remain strong, with $4.1 billion reported at the end of Q4.
The company is also set to launch a platform targeting mid-market customers and is investing in AI and data-driven strategies to improve customer retention and increase average revenue per user.
InvestingPro Insights
As Piper Sandler raises its price target on Intuit (NASDAQ:INTU), InvestingPro data provides additional context that may be of interest to investors considering the stock. Intuit's market capitalization stands at a robust $185.98 billion, reflecting its significant presence in the market. Its Price/Earnings (P/E) ratio is currently high at 63.79, indicating a premium valuation compared to the broader market, which aligns with Piper Sandler's optimistic view. The company's gross profit margins are impressive at 79.62%, showcasing its ability to maintain profitability and efficiency in operations.
Among the InvestingPro Tips, two particularly stand out in the context of this article. First, Intuit has raised its dividend for 13 consecutive years, underlining a commitment to returning value to shareholders—a detail that complements the positive outlook provided by Piper Sandler. Second, Intuit is recognized as a prominent player in the Software industry, reinforcing the company's strong positioning mentioned in the analysis.
For investors seeking a deeper dive into Intuit's potential, InvestingPro offers 16 additional tips that could help in making a well-informed decision. As Intuit continues to integrate AI into its offerings and operations, these insights could prove valuable in assessing the company's long-term growth trajectory. For more detailed analysis and tips, investors can visit https://www.investing.com/pro/INTU.
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