Insights

• Intuit's revenue growth is decelerating, which could be a sign of slowing demand or increased competition.
• The company is struggling to control operating expenses, which is contributing to the decline in profitability.
• The company's profitability is declining, as evidenced by decreasing gross margin, operating margin, and net margin.
• The company's cash flow from operations is decreasing, which could be a result of a decline in profitability or changes in working capital management.
• The company's capital expenditures have been decreasing, which could indicate a slowdown in investments in new technology or expansion of operations.
• The company's debt issuance has been increasing, which could be a result of financing acquisitions or investments.
• The company's net income growth has been outpacing its operating cash flow growth, which could be a sign of aggressive accounting practices or a decline in the quality of earnings.
• The company's liquidity position appears strong, with a significant amount of cash and short-term investments.
• The company's long-term solvency appears stable, with a moderate level of debt.
• The company's asset utilization efficiency is improving, as evidenced by the decreasing trend in receivables.
• The company's capital structure is evolving, with a shift towards more long-term debt financing.
• The company's recent acquisition of Mailchimp and reorganization of internal functions suggest a proactive approach to adapting its business model and operations to changing market dynamics.
• The company's strategic focus on AI, data, and virtual expert platforms positions it well to capitalize on industry trends and deliver innovative solutions to customers.
• The company's recent acquisition of Mailchimp and reorganization of internal functions suggest a proactive approach to adapting its business model and operations to changing market dynamics.

Analysis

• Revenue - Revenue growth is decelerating, which could be a sign of slowing demand or increased competition. - The company's recent acquisition of Mailchimp and reorganization of internal functions suggest a proactive approach to adapting its business model and operations to changing market dynamics. - The company's strategic focus on AI, data, and virtual expert platforms positions it well to capitalize on industry trends and deliver innovative solutions to customers.
  • Profitability
    • The company's profitability is declining, as evidenced by decreasing gross margin, operating margin, and net margin.
    • The company is struggling to control operating expenses, which is contributing to the decline in profitability.
    • The company's return on average assets, return on average total equity, return on average total capital, and return on average invested capital are all above the industry average, indicating that it is generating a relatively high level of profit from its assets, equity, capital, and invested capital. However, the trend is decreasing, which could be a sign of declining profitability.
  • Liquidity
    • The company's liquidity position appears strong, with a significant amount of cash and short-term investments.
    • The company's current ratio and quick ratio are below the industry average, indicating that it has a lower level of liquidity than its peers.
  • Solvency
    • The company's long-term solvency appears stable, with a moderate level of debt.
    • The company's total debt to total equity ratio and debt to EBITDA ratio are below the industry average, indicating that it has a lower level of financial leverage than its peers.
  • Operational Efficiency
    • The company's asset utilization efficiency is improving, as evidenced by the decreasing trend in receivables.
    • The company's enterprise value to EBITDA ratio and enterprise value to sales ratio are above the industry average, indicating that it is valued more favorably by the market than its peers. However, the trend is decreasing, which could be a sign of declining profitability.
    • The company's gross profit margin, net profit margin, and EBITDA margin are all above the industry average, indicating that it is able to generate a relatively high level of profit from its sales. However, the trend is decreasing, which could be a sign of declining profitability.
  • Cash Flow Analysis
    • The company's cash flow from operations is decreasing, which could be a result of a decline in profitability or changes in working capital management.
    • The company's capital expenditures have been decreasing, which could indicate a slowdown in investments in new technology or expansion of operations.
    • The company's debt issuance has been increasing, which could be a result of financing acquisitions or investments.
    • The company's net income growth has been outpacing its operating cash flow growth, which could be a sign of aggressive accounting practices or a decline in the quality of earnings.
  • Risk Factors
    • The company faces intense competition, both from established players and emerging disruptors, which could pressure its revenue and profitability.
    • The company's highly seasonal tax businesses create volatility in its financial results.
    • Regulatory changes, particularly around data privacy and tax preparation, pose ongoing risks that the company must navigate carefully.
    • The company's recent acquisition of Mailchimp and reorganization of internal functions suggest a proactive approach to adapting its business model and operations to changing market dynamics.
  • Future Outlook
    • The company's recent acquisition of Mailchimp and reorganization of internal functions suggest a proactive approach to adapting its business model and operations to changing market dynamics.
    • The company's strategic focus on AI, data, and virtual expert platforms positions it well to capitalize on industry trends and deliver innovative solutions to customers.
    • The company's recent acquisition of Mailchimp and reorganization of internal functions suggest a proactive approach to adapting its business model and operations to changing market dynamics.

Benchmarks (as of 2024-11-25)

• Performance Comparison:
  • INTU has consistently underperformed XLK across all periods, with the most significant underperformance observed in the 3-year period, where INTU underperformed by 47.35%.
  • INTU's performance has been inconsistent relative to XLK, with periods of outperformance and underperformance.
• Risk and Return Analysis:
  • INTU has provided lower annualized returns than XLK across all periods, indicating that XLK has generated higher returns for investors.
  • INTU has exhibited higher annualized volatility than XLK, suggesting that INTU is more susceptible to price fluctuations and carries a higher risk profile.
  • INTU's maximum drawdown of 49.01% is significantly larger than XLK's maximum drawdown of 33.56%, indicating that INTU has experienced more substantial price declines and has a higher risk profile.
• Risk-Adjusted Performance:
  • XLK has consistently offered a better risk-adjusted return than INTU, as indicated by its higher Sharpe ratio across the period.
  • INTU's beta value greater than 1 suggests that the stock is more sensitive to market movements than the overall market, indicating a higher risk profile.
• Overall Assessment:
  • INTU has underperformed XLK across all periods, with lower annualized returns and higher volatility.
  • INTU's higher maximum drawdown and beta value indicate a higher risk profile compared to XLK.
  • While INTU's Sharpe ratio has shown improvement in recent quarters, XLK has consistently delivered better risk-adjusted returns.
  • Investors seeking higher returns and a lower risk profile may find XLK a more attractive investment option compared to INTU.

Peers Price History(as of 2024-11-25)

• Performance Comparison:
  • INTU has consistently underperformed both TEAM and CRM over the past three years, with the exception of the 3-year period where it outperformed TEAM. This underperformance is particularly evident in the shorter timeframes, such as the year-to-date, 1-week, and 1-month periods.
  • The consistency of INTU's underperformance suggests that it may be facing challenges in keeping up with the growth and performance of its peers.
• Risk and Return Analysis:
  • While INTU has underperformed its peers in terms of returns, it has also exhibited lower annualized volatility than TEAM, suggesting that it may be a less risky investment option.
  • The maximum drawdown figures highlight the risk profile of each company. TEAM experienced the largest drawdown, indicating a higher risk profile. INTU's drawdown was also significant, but lower than TEAM's, suggesting a slightly lower risk profile. CRM's drawdown was the lowest, indicating the lowest risk profile among the three.
• Risk-Adjusted Performance:
  • INTU's Sharpe ratio has generally been higher than CRM's, indicating a better risk-adjusted return. However, INTU's Sharpe ratio has been similar to TEAM's, suggesting that both companies offer comparable risk-adjusted returns.
  • INTU's beta value, which is consistently above 1, indicates that it is more sensitive to market movements than TEAM and CRM. This suggests that INTU's returns are likely to be more volatile than its peers.
• Overall Assessment:
  • INTU has underperformed its peers in terms of returns but has also exhibited lower volatility and a slightly better risk-adjusted return than CRM. However, INTU's higher beta suggests a higher risk profile compared to its peers.
  • The consistent underperformance of INTU in recent periods raises concerns about its ability to keep up with the growth and performance of its peers. Investors should carefully consider the trade-off between INTU's lower volatility and its underperformance in returns.
  • The recent trends in volatility, drawdowns, and Sharpe ratios suggest a potential improvement in market sentiment and risk-adjusted returns for all three companies. However, it is important to monitor these trends closely to assess the sustainability of this improvement.

Peers Fundamentals(as of 2024-10-31)

1. Market Position and Size:

   • INTU is a mid-sized company in the "Technology Services" sector and "Packaged Software" industry, with a market capitalization of 177716.0, significantly larger than TEAM but smaller than CRM.
   • INTU's market cap is positively correlated with its revenue, EBITDA, and net income, reflecting its strong financial performance.

2. Profitability and Efficiency:

   • INTU demonstrates strong profitability metrics, consistently outperforming both peers and industry averages in Gross Profit Margin, EBITDA Margin, and Net Profit Margin.
   • INTU's high returns on assets, equity, total capital, and invested capital indicate its efficient utilization of resources to generate profits.

3. Financial Health and Stability:

   • INTU maintains a healthy liquidity position, with moderate current and quick ratios, although below industry averages.
   • INTU's debt levels are moderate compared to its peers and the industry, suggesting a conservative approach to financing.

4. Valuation and Market Perception:

   • INTU's valuation metrics are generally higher than its peers, suggesting that the market perceives it as a more valuable company.
   • However, its valuation metrics are lower than the industry average, indicating that the market may be pricing in some potential risks or limitations.

5. Cash Flow and Capital Management:

   • INTU generates a significant amount of free cash flow, indicating a healthy business model and strong financial performance.
   • INTU invests a significant amount in capital expenditures, suggesting a focus on growth and expansion.

6. Growth and Future Prospect:

   • INTU's growth has been decelerating over the past five years, particularly in sales, EBITDA, net income, basic earnings per share, and free cash flow.
   • However, INTU shows strong growth in specific areas, such as free cash flow margin and EBIT margin, indicating a focus on improving operational efficiency and profitability.

7. Potential for Investment:

   • INTU's strong financial performance, including profitability, efficiency, and cash flow generation, makes it an attractive investment.
   • However, its decelerating growth and lower valuation compared to the industry average raise concerns.

8. Key Risks and Considerations:

   • Decelerating growth: INTU's growth rates have been consistently decreasing over the past five years, which could impact its future performance.
   • Valuation discount: The market may be pricing in some potential risks or limitations, which could affect its future share price.
   • Competition: The "Technology Services" sector is highly competitive, and INTU needs to maintain its competitive edge to sustain its growth.

9. Overall Assessment:

   • INTU is a financially strong company with a solid business model and efficient operations.
   • However, its decelerating growth and lower valuation compared to the industry average raise concerns about its future prospects.
   • Investors should carefully consider these factors and assess whether INTU's growth potential and valuation justify its current price.