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Is a Beat Likely for Intuit (INTU) This Earnings Season?

Intuit INTU is likely to beat expectations when it reports fourth-quarter fiscal 2022 results after market close on Aug 23. In the last reported quarter, the company delivered an earnings surprise of 0.7%.

The company’s earnings surpassed estimates thrice in the trailing four quarters while missing the same on one occasion, the average beat being 16.8%.

For the fiscal fourth quarter, Intuit projects revenues to decline year over year in the 8-9% range. The Zacks Consensus Estimate for revenues is pegged at $2.35 billion, indicating a year-over-year decline of 8.1%.

On a non-GAAP basis, Intuit anticipates reporting earnings per share in the range of 94 cents-$1.00. The consensus mark for earnings stands at 99 cents per share, suggesting a year-over-year decline of 49.8%.

Intuit Inc. Price and Consensus

Intuit Inc. price-consensus-chart | Intuit Inc. Quote

Factors to Note Ahead of Q4 Results

The gradual recovery in the Small Business and Self-Employed might have contributed to the top line during the quarter under review. The Zacks Consensus Estimate for Small Business’ revenues in the quarter stands at $1.67 billion.

Intuit’s fourth-quarter revenues are likely to have witnessed solid growth in the Online Ecosystem, driven by an expanding subscriber base for Quickbooks Online and ARPC. The Zacks Consensus Estimate for total Online Ecosystem’s revenues is pegged at $1.2 billion for the quarter under review, indicating a 55.5% increase from the prior year's reported figure. The consensus mark for Quickbooks Online’s revenues stands at $631 million, suggesting a 35% improvement year over year.

Revenues from the Credit Karma business (acquired in December 2020) are likely to have boosted overall sales during the fourth quarter. The Zacks Consensus Estimate for Credit Karma’s revenues stands at $475 million, indicating year-over-year growth of 17.3%. The business unit contributed $468 million to INTU’s third-quarter fiscal 2022 total revenues.

Additionally, the solid momentum of the company’s leading product, QuickBooks Capital, and improving customer retention rates might have acted as tailwinds in the fiscal fourth quarter.

However, an earlier IRS tax filing deadline for 2022 is anticipated to have led to significantly lower revenues from the company’s Consumer tax business during the quarter under review. The Zacks Consensus Estimate for the Consumer tax business’ revenues is pegged at $145 million, lower than the year-ago quarter figure of $852 million. The Consumer tax segment’s performance is likely to have more than offset the benefits of the strong revenue growth expected in the aforementioned businesses.

Also, the transition of Desktop Ecosystem offerings to a subscription model is anticipated to have hurt sales growth.

Earnings Whisper

Our proven model predicts an earnings beat for Intuit this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.01 per share) and the Zacks Consensus Estimate (99 cents per share), is +1.92%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: INTU carries a Zacks Rank #2.

Other Stocks With the Favorable Combination

Per our model, Campbell Soup CPB, Oracle ORCL and Science Applications International SAIC also have the right combination of elements to post an earnings beat in their upcoming releases.

Campbell Soup carries a Zacks Rank #2 and has an Earnings ESP of +0.67%. The company is expected to report fourth-quarter fiscal 2022 results on Sep 7. Campbell Soup’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CPB’s fourth-quarter earnings is pegged at 56 cents per share, indicating a year-over-year increase of 1.8%. The consensus mark for revenues stands at $1.97 billion, suggesting a year-over-year increase of 5.2%.

Oracle is expected to report first-quarter fiscal 2023 results on Sep 12. The company carries a Zacks Rank #2 and has an Earnings ESP of +1.41% at present. Oracle’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 5.8%.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.07 per share, suggesting a year-over-year improvement of 3.9%. ORCL’s quarterly revenues are estimated to increase 17.9% year over year to $11.47 billion.

Science Applications currently carries a Zacks Rank #3 and has an Earnings ESP of +1.19%. The company is slated to report its second-quarter fiscal 2023 results on Sep 1. Science Applications’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 23.6%.

The Zacks Consensus Estimate for Science Applications’ second-quarter earnings stands at $1.68 per share, implying a year-over-year decline of 14.7%. SAIC is estimated to report revenues of $1.82 billion, which suggests a decrease of 0.8% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Oracle Corporation (ORCL): Free Stock Analysis Report
 
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