Deutsche Bank Expecting 'Solid' Results Out Of Intuit

With Intuit Inc. INTU scheduled to report its F3Q16 results on May 24, Deutsche Bank’s Nandan Amladi expects upside to the consensus revenue and EPS expectations.

Amladi reiterated a Buy rating on the company, with a price target of $125.

F3Q16 Upside

The analyst mentioned that Intuit is likely to have benefited during the quarter from the share gains due to robust growth in DIY tax returns and continued subscriber add momentum for QBO.

Amladi believes the company’s market share is likely to have increased by a few points from the 62 percent recorded for FY15.

“We also expect upside to QBO subscriber target numbers for the year, with FY17 targets likely remaining in the achievable 2.0 million – 2.2 million range,” Amladi stated.

Market Share Gains

According to the latest reported IRS filing statistics, the DIY category grew 5.7 percent year-on-year, with e-filings rising 2.6 percent year-on-year and total returns increasing 1.5 percent year-on-year.

Intuit reported 15 percent online unit growth, as compared to 13 percent in the previous year, “and it appears INTU likely gained two points or possibly even more of market share this season,” Amladi noted.

Management had raised its FY16 consumer tax revenue guidance from the earlier 5–7 percent to 8–9 percent in February.

QBO Momentum

The analyst expects Intuit to have added about 123,000 net subscribers for QBO during F3Q16, representing 43 percent year-on-year growth, with total QBO subscribers rising to 1,380,000 at the end of the quarter.