What Happened?
Shares of tax and accounting software provider, Intuit (NASDAQ:INTU) jumped 13.6% in the morning session after the company delivered strong fourth-quarter 2024 results, beating analysts' billings forecasts as revenue climbed 17% year on year. Growth came from a 19% jump in its Global Business Solutions Group, powered by QuickBooks and Mailchimp, while Credit Karma revenue soared 36%, driven by rising demand for credit cards and personal loans. Profits grew even faster. Operating income surged 61% under GAAP accounting, while non-GAAP operating income rose 26%, thanks to better margins. This strength lifted non-GAAP EPS by 26%, topping expectations.
For the full year, the company reaffirmed its outlook. Overall, the quarter was strong, with solid revenue and profit growth, though the unchanged full-year forecast signals stable rather than accelerating momentum.
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What The Market Is Telling Us
Intuit’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Intuit and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 8.3% on the news that the company reported weak second-quarter 2024 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 down 0.4% since the beginning of the year, and at $620.16 per share, it is trading 12.2% 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 $2,214.
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