Intuit Stock is a Tax Seasonal Buy

Financial management and business software developer Intuit NASDAQ: INTU stock has had a banner 2021 but shares are starting to fall sharply despite strong earnings guidance. The maker of Quickbooks accounting software solutions is gaining much momentum with its Credit Karma products. The Company also completed its acquisition of MailChimp. Intuit has five “big bets” they’re pursuing to capitalize on strong market tailwinds. The Company raised its fiscal Q2 2022 revenues to rise up to 74% from the year-ago same period. Its subscription model is producing phenomenal results. Intuit also plans to pursue more investments in fintech startups to get in on the ground floor of innovation as it pertains to finance management products. Seasonally, shares tend to rebound during the tax season as people migrate to its Quickbooks and TurboTax products. Prudent investors can get a jump on the shares early on opportunistic pullback levels.

Fiscal Q1 2022 Earnings Release

On Nov. 18, 2021, Intuit released its fiscal first-quarter 2022 results for the quarter ended October 2021. The Company reported earnings-per-share (EPS) profit of $1.53 versus $0.97 consensus analyst estimates, a $0.56 beat. Revenues grew 51.7% year-over-year (YoY) to $2.01 billion, beating analyst estimates for $1.81 billion.  

Upside Guidance 

Intuit raised fiscal Q2 2022 EPS between $1.84 to $1.88 versus $1.51 consensus analyst estimates on revenues between $2.73 to $2.74 billion versus $2.30 billion estimates. The Company raised full-year fiscal 2022 EPS between $11.48 to $11.64 versus $11.24 consensus analyst estimates. The Company expected full-year 2022 revenues between $12.165 billion to $12.30 billion versus $11.15 billion consensus analyst estimates. Intuit CEO Sasan Goodzari commented, “We are off to a strong start in fiscal year 2022, delivering on our strategy of becoming an AI-driven expert platform powering the prosperity of consumers and small businesses. We continue to see strong momentum and proof that our Big Bets are further positioning us for durable growth in the future, and we're delighted that Mailchimp has joined Intuit."

Conference Call Takeaways

CEO Goodzari set the tone, “First quarter revenue grew 52%, including 32 points from the addition of Credit Karma. Total revenue growth was fueled by small business and self-employed group revenue growth of 22%, and Credit Karma revenue of $418 million, another record quarter. Consumer Group and ProConnect Group revenue was in line with our expectations in a seasonally small quarter.

As a result, both of our strong start to the year and the close of Mailchimp transaction, we are raising our revenue and non-GAAP operating income and earnings-per-share guidance for fiscal year 2022. Michelle will cover this in detail later. Our AI-driven expert platform strategy is accelerating innovation and our 5 Big Bets for solving the largest problems are customers states face. We continue to deliver strong proof points that demonstrate the success and are well-positioned for durable growth in the future. As a reminder, these Big Bets are revolutionized speed to benefit, connect people to experts, unlock smart money decisions, be the center of small business growth, and disrupt the small business mid-market.” He continued, “Given our learnings, we are excited about launching our improved experiences in the upcoming tax season. We believe Credit Karma Money is the key to driving growth in frequency of visits over time, one of the many key drivers of average revenue per monthly active user. Zooming out, we continue to grow members and are focused on building trust by delivering personalized financial products right for members, helping members save money, pay down debt, and get faster access to their money while providing insight and advice. Over time, we're creating a virtual cycle, which we expect to increase the frequency of engagement, transaction, and monetization across our ecosystem. Our fourth Big Bet is to become the center of small business growth by helping our customers get customers, get paid fast, manage capital, pay employees with confidence, and grow in an omnichannel world. 60% of small businesses struggled with cash flow and we are continuing to innovate to create solutions for customers to overcome this challenge. In fiscal year 2021, total payments volume on our platform grew 40% year-over-year to over $90 billion. An online payment volume grew more than 60% driven by an increase in customer using our payments offering. As we continue to innovate for our customers and payments, those using QuickBooks cash of nearly 3 times higher engagement compared to customers who've just used QuickBooks Online. To accelerate engagement and usage of our platform, we recently introduced Get Paid Upfront, a game - changing innovation that will help qualified customers get paid soon after their invoice is set. Our fifth Big Bet is to disrupt the small business mid-market with QuickBooks Online Advance. We're seeing strong traction with QBO Advance, with customers growing to 118,000 in fiscal year 2021, up 57% year-over-year. As we continue to move up-market and serve these customers most critical needs, we're seeing a services ecosystem ARPC that is 4x higher than the ARPC for QBO customers. We're pleased with our results and remain confident in our game plans to win. Across all of our Big Bets, we're building momentum and accelerating innovation, which we believe positions us well for durable growth in the future. This will be further fueled the by Mailchimp. I'm delighted that we closed Mailchimp.”

INTU Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for INTU stock. The weekly rifle chart peaked at the $718.89 Fibonacci (fib) level. Shares dumped quickly after the earnings gap as the weekly 5-period moving average (MA) stalls at $649.84 followed by a rising 15-period MA at $595.30. The weekly stochastic peaked and crossed back down towards the 80-band.

The weekly market structure high (MSH) sell triggered on the $647.96 breakdown. The daily rifle chart is losing steam as the uptrend stalls with a falling 5-period MA at $666.19 followed by the 15-period MA support at $657.96. The daily stochastic formed a mini inverse pup with lower daily Bollinger Bands (BBs) at $572.65. Bulls needs to protect the daily market structure low (MSL) buy trigger at $629.38.   Prudent investors can monitor for opportunistic pullback levels at the $618.99 fib, $598.60 fib, $584.41 fib, $570.21 fib, $550, $537.97 fib, $524.26 fib, $512.25 fib, $512.25 fib, and the $499.78 fib. Upside trajectories range from the $697.19 fib up towards the $797.32 fib level.