For most investors, how much a stock’s price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you’d invested in Intuit (INTU) ten years ago? It may not have been easy to hold on to INTU for all that time, but if you did, how much would your investment be worth today?
Intuit’s Business In-Depth
With that in mind, let’s take a look at Intuit’s main business drivers.
Headquartered in Mountain View, CA, Intuit Inc. is a business and financial software company that develops and sells financial, accounting and tax preparation software and related services for small businesses, consumers and accounting professionals globally. The company has offices in the United States, Canada, India, the United Kingdom, Singapore, Australia, and other locations.
In fiscal 2022, Intuit generated total revenues of $12.73 billion. The company has four reportable segments: Small Business and Self-Employed Group, Consumer and Strategic Partner, ProConnect and Credit Karma.
Small Business and Self-Employed Group (50.8% of fiscal 2022 revenues) segment serves small businesses and self-employed people around the world, and the accounting professionals who serve and advise them. Intuit’s offerings include QuickBooks financial and business-management online services and desktop software, payroll solutions, merchant payment-processing solutions, and financing for small businesses.
Consumer (30.8% of fiscal 2022 revenues) segment offers DIY and assisted TurboTax income-tax preparation products and services. These solutions are sold in the United States and Canada. Intuit’s Mint and Turbo offerings serve consumers and help them understand and improve their financial lives by offering a view of their financial health.
ProConnect (4.3% of fiscal 2022 revenues) serves professional accountants in the United States and Canada, who are essential to both small businesses’ success and tax preparation and filing. Intuit’s professional tax offerings include Lacerte, ProSeries, ProFile, and ProConnect Tax Online.
Credit Karma (14.2% of fiscal 2022 revenues) segment offers personal finance services including credit cards, personal loans, home and auto loans and insurance.
In the Small Business and Self-Employed segment, Intuit competes with companies such as The Sage Group. In payroll, it competes with Automatic Data Processing and Paychex, among others. In the area of merchant services, the company’s rivals are financial institutions like Wells Fargo, JP Morgan Chase and Bank of America. In the Consumer Segment, Intuit faces intense competition from tax preparation service provider H&R Block.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Intuit ten years ago, you’re probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2013 would be worth $7,467.56, or a 646.76% gain, as of June 30, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 173.70% and the price of gold went up 48.68% over the same time frame.
Looking ahead, analysts are expecting more upside for INTU.
Intuit is benefiting from strong momentum in online ecosystem revenues and solid professional tax revenues. The TurboTax Live offering is also driving growth in the Consumer tax business. Solid momentum in the company’s lending product, QuickBooks Capital, remains a positive. Moreover, the company’s strategy of shifting its business to cloud-based subscription model will help generate stable revenues over the long run. We expect Intuit’s revenues to grow at a CAGR of 12.2% through fiscal 2023-2025. Nonetheless, macroeconomic and geopolitical headwinds might significantly hurt small businesses operations, thereby posing risks for Intuit’s top-line growth. Additionally, higher costs and expenses due to increased investments in marketing and engineering teams are likely to continue impacting bottom-line results in the near term.
The stock is up 7.98% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 10 higher, for fiscal 2023. The consensus estimate has moved up as well.
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