Replies to post #130664 on Savvy Trades and Investments

[SSKILLZ1]

INTU

Brought a small position in INTU today at $310.75. The stock is at multi year lows after beat and raising guidance. here is what I like.

1) INTU is guiding for $23.80-23.85, probably will be north of $24 for this FY when all said and done. Thing is I'm already thinking about next year (which will be this year soon enough), and the year after. Next quarter is q4 for them I think they will do about $28 Next Year and the $32 following year, Which lets face it will be next years estimates 3 months from now. That mean in 3 months it will probably be trading at less than 10x next years estimates in 3 months. Which given this stock normally trades at 30-40-50x for it's consistency of solid growth which in my opinion is not going away anytime soon. I think they deserve a 15x multiple at minimum hence a year from now i could see this stock rebound to say the upper 400's.

2) INTU Continues to return back to shareholder buying back stock, and over time continuing to raise the dividend, so that is a plus.

3) INTU Believes 15%+ EPS growth is sustainable for years to come hence part of why I like this stock.

4) I believe INTU business is very sticky, in fact retention actually went up they said in this quarter so clearly I believe there customers are not going anywhere and they continue to gain many new ones everyday.

5) INTU track record of EPS growth, is amazing it is up every year, in fact the worst they have done over this long period is 16% eps growth.

 
 FY 26:$23.80-23.85 Estimate. I think it will be slightly north of $24 when all said and done. (18% Growth based on current estimates) 
 FY 25: $20.15  (19% Growth) 
 FY 24: $16.94 (18% Growth) 
 FY 23: $14.40 (22% Growth) 
 FY 22: $11.85 (22% Growth) 
 FY 21: $9.74 (24% Growth) 
 FY 20: $7.86 (16% Growth) 
 FY 19: $6.75 (17% Growth) 
 FY 18: $5.78 (31% Growth) 
 FY 17: $4.41 (17% Growth) 
 FY 16: $3.78 
 

6) Why is INTU down today? Part of there business the Turbotax business had 7% revenue growth over 8% expected in the quarter. granted there belief that it was mostly thanks to not having the right product for people making under 50k was to blame.

Conclusion: I think INTU is a very attractive beaten down play here, for a stock that would often trade at 3x the multiple. The eps growth basically remains no different, but the valuation has dropped significantly. Maybe I'm early, but I truly believe that INTU has a very sticky customer base shown by the retention rate actually going up, the impressive growth in new customers, the capital return profile, and the consistent EPS growth story that has been impressively shown by the chart above. All is just my opinion, and I could always be wrong though.

[SSKILLZ1]

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