) is set to report first-quarter fiscal 2014 results on Nov 21.
Last quarter, it posted a negative surprise of 22.2%. Let us see
how things are shaping up for this announcement.
Factors This Past Quarter
Intuit reported wider-than-expected loss in the fourth quarter
of 2013 and its revenues lagged the Zacks Consensus Estimate.
However, revenues increased year over year, primarily driven by
strong performance of its business segments, higher costs led to
contraction of margins and the subsequent decline in profits.
We are positive on Intuit's growing SMB (small & medium
business) exposure and believe that the Demandforce acquisition
will continue to support the segment. The company's is focusing
on revamping its products with new mobile design. Its TurboTax
solutions help customers to prepare and file online tax returns
via tablet, mobile phone or desktop computers. These new
offerings are expected to increase its customer base going
Additionally, Intuit is moving to additional open platforms
with application programming interfaces that help to solve
problems faster and more efficiently. However, stiff competition
from the leading payroll solution provider,
), in the SMB arena, seasonality of Intuit's tax business and the
ongoing uncertainty in the economy concern us.
Our proven model does not conclusively project Intuit as
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
ESP for Intuit is -10.0%. This is because the Most
Accurate Estimate is pegged at a loss of 22 cents while the Zacks
Consensus Estimate stands at a loss of 20 cents.
Intuit's Zacks Rank #3 (Hold) when combined with a negative ESP
makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into an earnings announcement, especially when the
company is witnessing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that they have the right combination of elements to
post an earnings beat this quarter:
Best Buy Co. Inc.
), with Earnings ESP of +9.09% and a Zacks Rank #1 (Strong
), with Earnings ESP of +16.67% and a Zacks Rank #2 (Buy).
BEST BUY (BBY): Free Stock Analysis Report
INTUIT INC (INTU): Free Stock Analysis Report
PAYCHEX INC (PAYX): Free Stock Analysis
TIVO INC (TIVO): Free Stock Analysis Report
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