A month has gone by since the last earnings report for Intuit (INTU). Shares have added about 1.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Intuit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Intuit Crushes Q4 Earnings & Revenue Estimates, Guides Strong

Intuit ended fiscal 2021 with outstanding fourth-quarter results, wherein revenues and earnings surpassed the respective Zacks Consensus Estimate, as well as marked significant year-over-year improvement.

The company reported fiscal fourth-quarter non-GAAP earnings of $1.97 per share, which beat the Zacks Consensus Estimate of $1.59. Moreover, the bottom-line figure increased 9% from the year-ago quarter’s earnings of $1.81 per share.

Revenues of $2.56 billion surpassed the consensus mark of $2.32 billion and climbed 41% year on year as well.

The year-over-year surges in the top and bottom lines reflect strong growth in the do-it-yourself category as well as solid revenue contribution from the newly-acquired Credit Karma business. Credit Karma contributed $405 million to the company’s quarterly total revenues.

Solid contribution from TurboTax Live was a positive. Moreover, solid customer growth was a top-line driver.

Quarter in Detail

Segment wise, Small Business and Self-Employed Group revenues grew 19% year over year to $1.25 billion. This rise was primarily driven by solid growth in customers for QuickBooks Online and a favorable mix-shift. In addition, approximately $4 million of non-recurring revenues from the Paycheck Protection Program boosted this segment.

Total Online Ecosystem revenues climbed 30% year on year to $770 million. QuickBooks Online Accounting revenues were up 28% year over year. Online Services revenues, which include payroll, payments, time tracking and capital, grew 35% year over year.

Within QuickBooks Online payroll, a mix-shift to Intuit’s full-service offering was a tailwind. Also, within QuickBooks Online payments, continued uptick in the customer base drove revenues.

Total international online revenues increased 47%, year over year, on a constant-currency basis.

Total Desktop ecosystem revenues grew 5%, year on year, during the reported quarter.

In the fiscal fourth quarter, revenues from Consumer Group jumped 20% year on year to $852 million.

Intuit’s non-GAAP operating income increased 16% to $715million.

Fiscal 2021 Highlights

The company reported fiscal 2021 non-GAAP earnings of $9.74 per share, which beat the Zacks Consensus Estimate of $9.35. Moreover, the bottom-line figure increased 24% from the year-ago quarter’s earnings of $7.86 per share. Revenues of $9.63 billion surpassed the consensus mark of $9.39 billion and climbed 25% year on year as well.

Balance Sheet and Cash Flow

As of Jul 31, 2021, Intuit’s cash and investments were $3.87 billion compared with $4.1 billion as of Apr 30.

The company repurchased stocks worth $467 million during the reported quarter and $1 billion in fiscal 2021.

The company’s board of directors has approved a new $2-billion share-repurchase authorization, increasing the total authorization limit to $3.3 billion.

Additionally, the company announced that its board has approved a quarterly cash dividend of 68 cents per share to be payable on Oct 18, 2021. The newly-approved cash dividend represents a year-over-year increase of 15%.

First-Quarter and Fiscal 2022 Outlook

For the fiscal first quarter, Intuit expects revenues between 36% and 38% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of 94-99 cents per share.

For fiscal 2022, the company projects revenues in the band of $11.05-$11.20 billion, calling for year-over-year growth of 15-16%. Adjusted earnings are projected between $11.05 and $11.25 per share, indicating a year-over-year increase of 13-16%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -56.49% due to these changes.

VGM Scores

At this time, Intuit has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Intuit has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

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