RBC Capital sees ‘strong future’ for Intuit stock By Investing.com

On Wednesday, RBC Capital initiated coverage on Intuit Inc. (NASDAQ:), assigning the stock an Outperform rating and setting a price target of $760. The firm’s positive outlook on Intuit is influenced by the company’s strong market presence, successful shift to a subscription-based model, anticipated benefits from its GenAI technology, and potential for margin growth.

Intuit, known for its tax and accounting software designed for small to medium-sized businesses (SMBs) and individual consumers, boasts a substantial customer base exceeding 100 million users, with more than 10 million SMB clients and over 90 million consumer users. RBC Capital’s commentary highlighted these factors as key contributors to Intuit’s robust market position.

The price target of $760 set by RBC Capital reflects confidence in Intuit’s continued growth trajectory. The company’s transition to a subscription model has been well-received, signaling a sustainable revenue stream going forward.

Additionally, the introduction and integration of GenAI technology are expected to provide further upside, enhancing Intuit’s offerings and possibly leading to increased user engagement and satisfaction.

RBC Capital also anticipates that Intuit will experience margin expansion. This financial metric is often associated with increasing profitability, suggesting that the company is expected to improve its operational efficiency and cost management, potentially leading to higher earnings over time.

The Outperform rating indicates that RBC Capital views Intuit’s stock as likely to perform better than the broader market or its sector peers. Investors and market watchers often look to such ratings and price targets as indicators of a stock’s potential movement, although they are not guarantees of future performance.

In other recent news, financial software company Intuit Inc. has been the subject of various developments. The company’s earnings per share estimates for fiscal year 2024 have been raised to roughly $16.80 from $16.32, reflecting a positive revenue outlook. However, Intuit was recently downgraded by Erste Group from Buy to Hold due to concerns about competitive pressures and limited upside potential.

In addition, Intuit announced plans to acquire technology from mobility risk intelligence company Zendrive. This move aims to enhance Credit Karma’s usage-based auto insurance feature, Karma Drive, in line with Intuit’s broader goal of doubling its customers’ household savings rate by 2030.

Analysts from firms such as BofA Securities, Edward Jones, Susquehanna, and Piper Sandler have maintained positive ratings on Intuit’s stock, despite some adjustments to their price targets. These recent developments highlight the evolving landscape for Intuit as it navigates market challenges and opportunities.

InvestingPro Insights

As Intuit Inc. (NASDAQ:INTU) garners a favorable Outperform rating from RBC Capital, real-time data from InvestingPro bolsters the optimism surrounding the company’s financial health and market valuation. Intuit’s market capitalization stands at a robust $183.44 billion, reflecting its significant presence in the industry. The firm’s impressive gross profit margin, reported at 79.49% for the last twelve months as of Q3 2024, underscores its efficiency in maintaining profitability while scaling operations. Furthermore, Intuit has demonstrated a commendable revenue growth of 12.39% during the same period, signaling its successful expansion and adoption of its subscription-based model.

InvestingPro Tips highlight Intuit’s consistent track record of raising dividends, now for 14 consecutive years, appealing to investors seeking stable income. Moreover, Intuit’s substantial position as a key player in the Software industry is reflected in its high P/E ratio of 59.77, which, while indicating a premium valuation, also suggests investor confidence in its future earnings potential. However, it is important for investors to note that 16 analysts have revised their earnings expectations downwards for the upcoming period, emphasizing the need for a thorough analysis of potential risks.

For those looking to delve deeper into Intuit’s financial metrics and gain additional insights, InvestingPro offers a wealth of information. Currently, there are 17 more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/INTU. To enrich your investment research, use the exclusive coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking a comprehensive suite of tools and analytics.

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