Intuit Stock Prediction: Accounting Software Leader Intuit Has More Upside Potential

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

INTU Stock Prediction


  • Intuit’s stock posted a new 52-week high of $140.25 after it reported better-than-expected Q3 FY 2017 earnings.
  • In spite of stiff competition, Intuit’s QuickBooks Online accounting SaaS product still posted 59% growth in subscribers, bringing the total 2.2 million.
  • QuickBooks Online also saw a 79% Quarter-over-Quarter growth in its international subscribers, bringing the total to 433,000.
  • The success of QuickBooks Online is why Intuit remains a leader in the global Enterprise SaaS. QuickBooks Online also appeals to medium and large enterprises.
  • INTU has positive market trend algorithmic forecasts from I Know First. It is therefore recommended to go long on INTU right now.

After topping EPS and revenue estimates, shares of Intuit (INTU) posted a new 52-week high of $140.25 after its Q3 FY 2017 earnings report last week. The stock has since pulled back to $138. However, I expect INTU to post a new 52-week high within the next six months. I am convinced that the stock market will again rally for Intuit if it beats its already-strong fourth-quarter guidance of $815 million revenue and $0.18 EPS.

INTU’s current YTD gain of 20.9% could still go higher by the time 2017 ends. In spite of the many rival accounting software out there, Intuit still enjoys 4.3 million loyal customers.


Intuit Stock Prediction

(Source: Google Finance).

Be More Optimistic Than The Management

Conservative forward guidance is always typical of management teams who run sector leaders like Intuit. This is to minimize risk of them losing face just in case their forward guidance proved to be below expectations. Intuit’s management is also being cautious when it said it expects to only have 2.3 million QuickBooks Online subscribers by end Q4. This is obviously understating on their part.

Intuit ended Q3 with 2.2 million QuickBooks Online subscribers, a 59% Quarter-over-Quarter growth. Past performance-wise, QuickBooks Online had 1.87 million subscribers in Q2 FY 2017 and and 1.4 million in Q1. Common sense tells me that Intuit’s projection that it will only add 100k new subscribers during the Q4 period is just plain understating.

I expect Intuit to end FY 2017 (which will end on July 31) with 2.4 to 2.5 million QuickBooks Online subscribers. Should this prove true, INTU’s price could hit $145 or $150 by early August. The steady growth of QuickBooks Online is why Intuit is now among the global leaders in Enterprise SaaS [Software-as-a-Service].

From its humble start of providing affordable tax and accounting software to home users and small business owners, Intuit has elevated itself to the level of Microsoft (MSFT), Adobe (ADBE), and Google (GOOG).

Small Rivals Can’t Really Hurt Intuit

Intuit’s success is because it only has to contend against small rivals like Xero and Zoho Books. SaaS leaders Microsoft and Google has also failed to offer competent alternatives to QuickBooks Online. Intuit’s leadership in accounting/bookkeeping SaaS is therefore safe for many years to come.

Xero has 1 million paid users, less than ¼ of Intuit’s current customer base. Unless Xero gets taken over by a much bigger firm, it will remain a far second to QuickBooks. It will still take years and lots of marketing money for Xero to achieve the global brand power of QuickBooks too. QuickBooks is already an industry-standard and a household name in North America, Europe, and Asia.


The 4.3 million paying customers of Intuit is just a drop in the bucket. The total addressable market for QuickBooks is 800 million. Intuit therefore has a lot of potential in the global market for home, small and large enterprise accounting services. As of now, QuickBooks’ biggest market is still the United States.

The charts below illustrate the massive opportunity for QuickBooks Online. Intuit has 1.2 million customers in the U.S. and its growing 40% CAGR. The expected potential customer size in USA is 65 million.

(Source: Intuit)

I rate INTU as a buy for long-term growth investors. This company also has positive short and long-term algorithmic forecasts. The one-year market trend score is also very high, +232.41. It means INTU has higher statistical probability of rising in price than it dropping.

The monthly technical indicators and moving averages are also very favorable for INTU. Going long on this stock now is highly likely to produce a positive return.



I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

Past I Know First Success With INTU

I Know First had a bullish forecast for INTU on February 10, 2016. Since this short term stock forecast’s release, INTU shares increased by 9.66% in a span of 14 days.  The return was more than double the S&P 500’s return of 4.19%.

(Source: Google Finance)

This bullish forecast for INTU was sent to I Know First subscribers on February 10, 2016. To subscribe today click here.