Intuit Inc (INTU, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $720.13, Intuit Inc has witnessed a daily gain of 8.12%, marked against a three-month change of 27.57%. A thorough analysis, underlined by the GF Score, suggests that Intuit Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 7/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability and growth, and a slightly lower GF Value rank, GuruFocus assigned Intuit Inc the GF Score of 97 out of 100, which signals the highest outperformance potential.
Company Overview: Intuit Inc
Intuit Inc serves small and midsize businesses with accounting software QuickBooks and online marketing platform Mailchimp. The company also operates retail tax filing tool TurboTax, personal finance platform Credit Karma, and a suite of professional tax offerings for accountants. Founded in the mid-1980s, Intuit enjoys a dominant market share for small business accounting and do-it-yourself tax filing in the US. With a market cap of $200.878 billion and sales amounting to $18.184 billion, Intuit Inc boasts an operating margin of 25.84%, reflecting its efficient business operations.
Financial Strength Breakdown
According to the Financial Strength rating, Intuit Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Intuit Inc stands impressively at 18.94, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 9.12, Intuit Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.39, Intuit Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Intuit Inc's impressive standing among its peers in generating profit. The Piotroski F-Score confirms Intuit Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding, and operating efficiency. Intuit Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Intuit Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 17.6%, which outperforms better than 74.9% of 2,510 companies in the Software industry. Moreover, Intuit Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 14.3, and the rate over the past five years is 15. This trend accentuates the company's continued capability to drive growth.
Conclusion: Intuit Inc's Path to Outperformance
Intuit Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. With a strong balance sheet, impressive profitability, and robust growth prospects, Intuit Inc is well-equipped to maintain its market leadership and deliver substantial returns to investors. For those seeking to explore more companies with strong GF Scores, GuruFocus Premium members can utilize the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
