Intuit Inc (NASDAQ:INTU) provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in three segments: Small Business & Self-Employed, Consumer, and Strategic Partner. The Small Business & Self-Employed segment provides QuickBooks online services and desktop software solutions comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; QuickBooks Self-Employed solution; and QuickBooks Online Accountant and QuickBooks Accountant Desktop Plus solutions; payroll solutions, such as online payroll processing, direct deposit of employee paychecks, payroll reports, electronic payment of federal and state payroll taxes, and electronic filing of federal and state payroll tax forms. This segment also offers payment-processing solutions, including credit and debit cards, and ACH payment services; and financial supplies and financing for small businesses. Its Consumer segment provides TurboTax income tax preparation products and services; and personal finance. The company’s Strategic Partner segment offers Lacerte, ProSeries, and ProFile desktop tax-preparation software products; and ProConnect Tax Online tax products, electronic tax filing service, and bank products and related services. It sells products and services through various sales and distribution channels, including multi-channel shop-and-buy experiences, websites and call centers, mobile application stores, and retail and other channels. Intuit Inc. has a collaboration agreement with Red Hat, Inc. on Argo CD, a declarative continuous delivery tool for Kubernetes deployments. The company was founded in 1983 and is headquartered in Mountain View, California.
Intuit has served as the standard for accounting and tax software. It built a name for itself in the 1990s by fending off a challenge from Microsoft. Intuit has been an integral part of the financial ecosystem for some time. With both TurboTax and QuickBooks, and more recently with Mint and Credit Karma, Intuit has made itself a leading financial software company for both consumers and businesses.
InfoClutch estimates a market share of about 80% for QuickBooks. TurboTax held a market share of 67% in 2019, according to ProPublica’s analysis of IRS tax filing data.
Intuit has built a moat centered around accounting and tax software, and it has so far kept its challengers at bay.
Intuit should continue to thrive this year and beyond based on its increasing focus on being an artificial intelligence (AI)-driven expert platform.
Listed below are reasons for plenty of upside.
- Intuit’s gross profit margin of 83.1% is much higher than the industry average 47.9%. The company also has impressive ROE and ROA of 44.3% and 18.7%, respectively. In addition, the company’s leverage free cash flow margin of 27.5% compares favorably with the industry average 11.8%.
- Intuit’s revenue increased at a CAGR of 13.9% over the past three years. INTU’s EBITDA and EPS also increased at CAGRs of 15.6% and 24.7%, respectively, over the same period.
- Analysts expect the company’s revenue to increase 43.7% for the quarter ending April 30, 2021, 16.2% in fiscal 2021 and 15.5% in fiscal 2022. Its EPS is expected to grow 42.5% for the quarter ending April 2021, 16.3% in fiscal 2022 and at a rate of 14% per annum over the next five years.
Therefore, based on its high profitability and continued product and service innovation with the help of AI, Intuit still has plenty of upside for this decade.