BofA Securities has updated its outlook for Intuit (NASDAQ: NASDAQ:INTU), a financial software company, increasing the price target to $780 from the previous $730 while maintaining a Buy rating on the stock. The firm's analyst cited the company's ability to sustain mid-teen growth rates as a key factor for the positive stance. According to the analyst, Intuit's growth is expected to continue, supported by its pricing power, market expansion, and enhanced functionality that increasingly substitutes traditional CPA roles.
Intuit's growth strategy, which now focuses more on average revenue per customer (ARPC) within its QuickBooks and TurboTax product lines, is seen as a viable approach to maintain its robust growth trajectory. The analyst believes that the company's leverage from a shared data, services, and operational platform will enable it to achieve significant scale.
The revised price objective represents a 37 times multiple of the company's forecasted calendar year 2025 free cash flow (FCF), an increase from the previous 35 times multiple. This adjustment reflects higher FCF estimates and positions the company at a premium compared to the general large-cap growth at a reasonable price (GARP), which typically trades at 1.1 times adjusted for FCF durability.
In other recent news, Intuit reported strong fourth-quarter earnings for fiscal year 2024, surpassing analyst expectations, and provided robust guidance for fiscal year 2025. The financial technology company saw a revenue increase of 13.3% for the fiscal year 2024, with an operating margin of 39.3%. For the upcoming fiscal year, the company anticipates steady growth of 12-13% and an operating margin expansion of approximately 60 basis points.
Meanwhile, Jefferies maintained a Buy rating on Intuit shares and increased the price target to $790, citing the company's consistent growth and expanding margins. Similarly, Evercore ISI reiterated its Outperform rating and a $725.00 price target, emphasizing the company's potential growth factors such as the expansion of AI assistance to approximately one million mid-market businesses.
Citi also maintained its Buy rating and raised its shares target for Intuit, reflecting confidence in the company's strong fourth-quarter performance and optimistic projections for 2025. These recent developments indicate a positive outlook for Intuit, backed by strong financial performance and strategic direction.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.