Intuit’s (INTU) fiscal Q2 exceeded expectations, with the small business segment being the primary upside driver, Oppenheimer said in a note Friday.
The firm raised Intuit’s price target to $712 from $678 while keeping its outperform rating.
Analysts, including Scott Schneeberger, said Intuit’s consumer segment, mainly TurboTax, faced challenges in the recent quarter due to a later start to the tax season compared to the previous year, while Credit Karma performed as expected.
The company is sticking to its guidance for the fiscal year, with the revenue growth expectations for each segment unchanged, and the small business segment appearing to be more “conservative,” the analysts added.
“Although fiscal 2024 TurboTax and Credit Karma revenue are cautiously guided below their long-term growth trends, we anticipate Intuit overall organic growth, driven by Small Business, to remain double-digits in fiscal 2024 and beyond,” the analysts said, adding that they expect “continued gradual margin expansion overall.”
The analysts also said the company’s free cash flow is sufficient to support internal investment, acquisitions, its expanding dividend, and share repurchases.
Shares of Intuit rose 1.4% in recent trading activity.