Jefferies has maintained a Buy rating on shares of Intuit (NASDAQ: NASDAQ:INTU) and increased the price target to $790 from $770 as the firm's analyst cited the company's consistent delivery of double-digit growth and expanding margins as key reasons for the positive outlook.
Intuit closed the fiscal year 2024 with a revenue increase of 13.3% and an operating margin of 39.3%, showing an improvement of 100 basis points, aligning with the rule of 52.
For fiscal year 2025, Intuit has guided towards a steady growth of 12-13% and an operating margin expansion of approximately 60 basis points. The analyst noted that Intuit typically sets conservative initial targets and has a track record of surpassing them. This pattern suggests that the company may again outperform its initial forecasts.
Jefferies also referenced Intuit's long-term targets, which have been revised to prudently reflect the business's evolution. The firm believes that these updated targets still offer potential for future upside. The analyst's comments highlighted confidence in Intuit's ability to adapt and continue its growth trajectory.
In other recent news, Intuit has been making significant strides with its financial performance and strategic growth plans. The software company reported a revenue increase of 17%, reaching $3.18 billion and surpassing analyst estimates.
This growth was largely driven by the small and medium-sized business (SMB) sector and the consumer tax platform Credit Karma. The company's adjusted earnings per share also exceeded consensus estimates.
Evercore ISI and Citi have maintained positive ratings on Intuit, highlighting the company's promising AI capabilities and potential for international expansion. The analysts also noted the company's strategy of focusing on average revenue per customer through pricing and product mix, which is expected to contribute to sustainable growth in both the SMB and consumer segments.
InvestingPro Insights
As Intuit (NASDAQ:INTU) garners a favorable outlook from Jefferies with an increased price target, InvestingPro data further enriches this perspective. Intuit boasts a robust market capitalization of $185.98 billion, underscoring its significant presence in the market. The company's gross profit margins are particularly impressive at 79.49%, reflecting efficient operations and a strong pricing power relative to its costs. This aligns with one of the InvestingPro Tips highlighting Intuit's impressive gross profit margins, which is a testament to its financial health and operational effectiveness.
While the company trades at a high earnings multiple, with a P/E ratio of 60.79, this is indicative of the market's high expectations for future growth, which may be justified by the company's consistent revenue increase, as shown in the last twelve months leading up to Q3 2024, with a 12.39% growth rate. Another InvestingPro Tip to consider is Intuit's history of raising its dividend for 13 consecutive years, reflecting a commitment to returning value to shareholders and a stable financial position that supports such consistent dividend growth.
For investors seeking further insights and tips on Intuit, there are numerous additional InvestingPro Tips available, providing an in-depth analysis of the company's financials and market position. These tips can guide potential investment decisions and offer a comprehensive understanding of Intuit's performance metrics.
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