Citi's View On Intuit Unchanged Following Quarterly Results

Shares of Intuit Inc. (NASDAQ: INTU) might be trading in the negative territory following its fourth-quarter results and guidance for the first quarter. However, Citi analysts, Walter Pritchard and Mathew Wells, have not changed their opinion on the stock.

The lead analyst thinks the results demonstrated acceleration in customer growth, which is key to his thesis. Despite flattish customer growth over the last few years, the company managed 12 percent revenue growth. Citi believes revenue and EPS could witness accelerated growth compared to the history if it could continue to record incremental monetization.

The brokerage has not only retained its Buy rating but also the price target of $128. Citi pointed out that the results were ahead of both its and the Street's estimates on both revenue and EPS.

Related Link: Morgan Stanley Sees Intuit Tailwinds Not Carrying Forward Strongly Into 2017

The lead analyst said in the research note, "QBO subs of 1.51 million was slightly below our 1.54 million as the higher-value 'core' U.S. subscriber base was ahead of our estimate, growing 34 percent (inline with last several quarters). As we expected, International was weak and self-employed didn't continue to see the inflection from Q2 / Q3 as tax season (where SE was bundled) has wound down. Attach and ARPU trends across the board showed good progress."

The brokerage is not unduly worried about the guidance, which, it felt, was in line with its preview. However, the analyst expects increased revenue conversion in the fiscal year 2017.

At time of writing, shares of Intuit were down 3.74 percent at $109.58.

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