) to beat expectations when it reports third quarter fiscal 2014
results on May 20.
Why a Likely Positive Surprise?
Our proven model shows that Intuit is likely to beat estimates
because it has the right combination of two key ingredients.
Positive Zacks ESP:
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at +1.18%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #2 (Buy):
Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating earnings. The sell rated
stocks (#4 and #5) should never be considered going into an
The combination of Intuit's Zacks Rank #2 and +1.18% ESP makes us
very confident about an earnings beat on May 20.
What is Driving the Better Than Expected Earnings?
Intuit's growing small and midsize business (SMB) exposure and
higher adoption rate of its cloud-based services and products are
expected to lead to a positive earnings surprise in the upcoming
quarter. Moreover, the company's accelerated share buyback program
would aid the bottom line.
Additionally, we believe that all Intuit's acquisitions in the
space, including Demandforce, Prestwick Services, LLC and Docstoc
will continue to provide support to the segment. Further, the
synergies from the acquisition will help Intuit to gain traction in
the SMB segment. Thus, the deals will prove to be accretive to both
margins and earnings.
Moreover, this will improve Intuit's competitive position against
the likes of
Other Stocks to Consider
Intuit is not the only firm looking up this earnings season. We
also see likely earnings beats coming from these 2 technology
) with Earnings ESP of +33.33% and a Zacks Rank #2 (Buy)
) with Earnings ESP of +17.86% and a Zacks Rank #2
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