July 31, 2019

INTU – Market expectations are for rapid Uniform ROA expansion, however management is concerned about growth, ARPC, and innovation

  • Intuit Inc. (INTU:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 38.5x Uniform P/E, implying bullish expectations for the firm. However, management is concerned about driving growth, ARPC, and innovation
  • Specifically, management may be concerned about their ability to drive durable growth, and they may lack confidence in their ability to meet the high end of estimates for revenue from their professional tax segment. Furthermore, management may be exaggerating the value of their AI-driven expert platform and their ability to innovate products to match customer demands. Moreover, management may be concerned about their ability to convert free filing customers to paid customers and improve ARPC.
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