What Happened?
Shares of tax and accounting software provider, Intuit (NASDAQ:INTU) fell 6.5% in the morning session after the company reported weak third-quarter results and provided revenue guidance for the next quarter, which fell short of Wall Street's estimates. Its EPS guidance missed by even more. On the other hand, sales and earnings exceeded expectations during the quarter. Overall, this was a softer quarter, and the stock's reaction suggests markets were expecting stronger guidance following the earnings beat.
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What The Market Is Telling Us
Intuit’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 8.3% on the news that the company reported weak second-quarter earnings results. Its gross margin declined, and its billings missed Wall Street's estimates. The company also provided underwhelming long-term guidance ahead of its investor day session. FY25 growth projection for the Consumer segment was lowered to 6-10% (from prior 8-12%). Similarly, Credit Karma revenue forecast was revised to 10-15% (from the prior 20-25%), while the SBSE ( Small Business and Self Employed) unit was unchanged at 15-20%. Overall, it was a challenging quarter, given the weak outlook.
Intuit is up 6.1% since the beginning of the year, but at $640.13 per share, it is still trading 9.4% below its 52-week high of $706.25 from November 2024. Investors who bought $1,000 worth of Intuit’s shares 5 years ago would now be looking at an investment worth $2,463.
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