Intuit Stock Pulls Back to Support – Smart Entry?
Intuit (INTU) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($286.88 – $317.08), levels from which it has bounced meaningfully before. Since it first started trading, Intuit stock received buying interest at this level 3 times and subsequently went on to generate 62.9% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 8/6/2020 | 13.4% | 27 |
| 9/22/2020 | 11.0% | 20 |
| 10/30/2020 | 164.3% | 1734 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for INTU?
Rebound potential, but TurboTax execution key.
Intuit’s recent Q3 beat and raised guidance demonstrate underlying financial strength despite workforce reductions and an ongoing TurboTax pricing investigation. While Goldman Sachs downgraded INTU due to tax competition, most analysts maintain “Buy” ratings with a median target suggesting significant upside. Current valuation is deeply discounted versus historical levels, offering compelling entry. Fintech tailwinds from AI integration (Intuit Enterprise Suite ERP) support long-term growth, though near-term Mailchimp revenue declines present a temporary hurdle. Consumer segment’s pricing strategy execution for TurboTax will dictate near-term stock performance.
How Do INTU Financials Look Right Now?
- Revenue Growth: 15.1% LTM and 14.2% last 3-year average.
- Cash Generation: Nearly 36.9% free cash flow margin and 27.5% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for INTU was 12.4%.
- Valuation: INTU stock trades at a PE multiple of 18.2
| INTU | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Application Software | – |
| PE Ratio | 18.2 | 23.9 |
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| LTM* Revenue Growth | 15.1% | 7.4% |
| 3Y Average Annual Revenue Growth | 14.2% | 5.7% |
| Min Annual Revenue Growth Last 3Y | 12.4% | 0.6% |
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| LTM* Operating Margin | 27.5% | 18.4% |
| 3Y Average Operating Margin | 25.7% | 18.3% |
| LTM* Free Cash Flow Margin | 36.9% | 14.5% |
*LTM: Last Twelve Months | For more details on INTU fundamentals, read Buy or Sell INTU Stock.
And What If The Support Breaks?
Intuit isn’t immune to sharp drops either. It fell 72% during the Dot-Com crash, lost 38% in the Global Financial Crisis, and slid nearly 49% through the recent inflation shock. Even the smaller sell-offs like 2018 and the Covid pandemic caused dips over 20%. The stock has plenty going for it, but history shows that in big market downturns, significant pullbacks are part of the game.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read INTU Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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