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Valens Research

INTU - Embedded Expectations Analysis - 2021 10 13

Intuit Inc. (INTU:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 49.6x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about revenue guidance, Credit Karma synergies, and their 5 Big Bets strategy.

Specifically, management may lack confidence in their ability to meet full year fiscal 2022 guidance, achieve Online Ecosystem revenue growth targets, and sustain combined platform revenue growth. In addition, they may have concerns about the launch of TurboTax Live Full-Service, the impact of price increases for QuickBooks, and the sustainability of elevated credit card and personal loan demand. Furthermore, management may lack confidence in their ability to execute their 5 Big Bets strategy, particularly the unlocking SMART Money decisions component, and capitalize on Credit Karma synergy opportunities with their other platforms. Moreover, they may be overstating the unique benefits Credit Karma can provide and the time efficiencies they've generated for customers with their AI models. Finally, management may lack confidence in their ability to maintain TurboTax's retention rate through constant engagement and continue driving innovation to support growth.
Underlying
Intuit Inc.

Intuit helps consumers, small businesses, and the self-employed prosper by delivering financial management and compliance products and services. The company also provides tax products to accounting personnels, who are main partners that help the company serves small business customers. The company organizes its businesses into three reportable segments: Small Business and Self-Employed, which provides QuickBooks financial management solutions to solve financial and compliance problems; Consumer, which includes TurboTax products and services to prepare and file income tax returns; and Strategic Partner, which includes professional tax offerings and serve professional accountants in United States and Canada.

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Valens Research
Valens Research

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