Intuit’s Q3 Proves The Company Can Continue Positive Growth, Says Credit Suisse

Courtesy of Benzinga.

Shares of Intuit Inc. (NASDAQ: INTU) gained more than 8 percent after the financial management solutions provider reported its fiscal third-quarter earnings report.

Following the report, Credit Suisse’s Michael Nemeroff maintained an Outperform rating on Intuit’s stock with a price target boosted from $120 to $150. Part of the analyst’s bullish stance stems from the company’s earnings report in which revenue, earnings per share, cash flows, and Quickbook net sub adds all came in at or above consensus estimates.

Nemeroff highlighted the company’s Consumer Tax revenue growth in the quarter rose 9.8 percent year-over-year, which contributed most of the revenue outperformance in the quarter. Growth in the Small Business unit was also “much better” than expected and driven primarily by Desktop revenue, which rose 12.2 percent.

Confidence In Growth

The analyst also argued the earnings report gives him confidence that management will be able to show a high-single-digit to low-double-digit revenue growth over time while simultaneously delivering faster earnings growth.

The analyst increased his fiscal 2017 earnings per share estimate from $5.08 billion to now $5.14 billion while his earnings per share estimate also rose from $4.38 to $4.39 per share.

Finally, Nemeroff’s price target implies a revenue compounded annual growth rate of 8.3 percent from 2019 to 2026 and terminal operating margin of 40 percent.

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