Look For Intuit's Quickbooks User Growth To Accelerate In 2017

Intuit Inc. INTU is a provider of business and financial management solutions and one of its prominent products is QuickBooks Online (QBO), an easy to use accounting software for individuals and small businesses.

In a research report on Wednesday, Yun Kim of Brean Capital maintained a Buy rating and $135 price target on Intuit's stock on the belief that the company's QB user base will show accelerated growth in 2017 and beyond.

Kim's thesis is based on the company's own subscriber target and applying conservative assumptions behind its desktop unit sales. The analyst suggested that this is not yet well understood by most investors and bodes well for the platform's overall monetization.

Digging Deeper

Kim continued that perhaps more importantly is the fact that the QBO average revenue per customer (ARPC) for the subscription business has stabilized despite an increasing mix of faster growing but lower priced QB Self-Employed (QBSE) version, which provides a stable basis for increasing monetization for the overall QB franchise.

Bottom line, the analyst believes Intuit can achieve the high end of its fiscal 2017 earnings per share guidance while also achieving the high end of its QBO sub target.

Finally, Intuit's stock is trading at 21x EV/FCF based on the analyst's 2017 estimate, which represents a discount to the industry's 24x average.

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