Intuit Inc.INTU is set to report second-quarter fiscal 2018 results on Feb 22. The company's revenues are likely to benefit from higher adoption of the company's enriched product suite. Acquisitions are expected to boost the top line as well. However, rising expenses are a major concern.
Factors to Consider
The company has two main products - QuickBooks, which offers financial, and business management online services and desktop software to small businesses, and TurboTax, which offers income tax preparation products and services.
There are over 29 million small and medium businesses in the United States alone. Intuit had over 2.55 million QuickBooks online subscribers in the country at the end of first-quarter fiscal 2018. We believe that Intuit has a lot of growth opportunity in this majorly untapped market.
Notably, the soon-to-be reported quarter has been quite an eventful one for the company. Intuit announced the appointment of Diego Rodriguez as executive vice president and chief product and design officer.
The company announced the launch of QuickBooks Capital, a product meant to solve lending related issues of small businesses. Additionally, the formation of a $15 million fund named "Lighter Capital Intuit Developer Fund" was announced by Lighter Capital for independent application developers of the Intuit QuickBooks platform.
Intuit also unveiled QuickBooks Assistant, a chatbot for user assistance. In January 2018, the company launched Turbo, an application to determine the financial standing of customers. The application is available on Apple AAPL App Store.
The company also signed an agreement to acquire TSheets in an attempt to incorporate time tracking systems. Moreover, in an attempt to increase its brand awareness, the company launched two advertisements on Feb 4, 2018 during Big Game, an American football match series.
However, Intuit's elevated costs and expenses remain a major headwind. Furthermore, stiff competition from payroll solution providers such as Paycom Software PAYC and Automatic Data Processing ADP is another concern.
Intuit Inc. Price and EPS Surprise
What Does the Zacks Model Say?
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Intuit has a Zacks Rank #2 and an Earnings ESP of -0.39%. This indicates that the company is unlikely to beat estimates. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.