It hasn't been a great afternoon session for Intuit investors, who have watched their shares sink by -4.8% to a price of $713.37. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Intuit's Valuation Is in Line With Its Sector Averages:
Intuit Inc. provides financial management, compliance, and marketing products and services in the United States. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, Intuit has a trailing 12 month P/E ratio of 58.1 and a P/B ratio of 9.89.
Intuit has moved 19.4% over the last year compared to 19.6% for the S&P 500 — a difference of -0.2%. Intuit has a 52 week high of $813.7 and a 52 week low of $532.65.
Strong Revenue Growth but an Average Current Ratio:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $6,784 | $7,679 | $9,633 | $12,726 | $14,368 | $16,285 |
| Operating Margins | 27% | 28% | 26% | 20% | 22% | 22% |
| Net Margins | 23% | 24% | 21% | 16% | 17% | 18% |
| Net Income (M) | $1,557 | $1,826 | $2,062 | $2,066 | $2,384 | $2,963 |
| Net Interest Expense (M) | $15 | $14 | $29 | $81 | $248 | $242 |
| Depreciation & Amort. (M) | $199 | $189 | $166 | $187 | $160 | $159 |
| Diluted Shares (M) | 264 | 265 | 277 | 284 | 283 | 283 |
| Earnings Per Share | $5.89 | $6.92 | $7.56 | $7.28 | $8.42 | $10.43 |
| EPS Growth | n/a | 17.49% | 9.25% | -3.7% | 15.66% | 23.87% |
| Avg. Price | $248.83 | $296.76 | $488.7 | $456.18 | $625.03 | $713.99 |
| P/E Ratio | 41.54 | 42.45 | 63.88 | 61.81 | 73.62 | 67.48 |
| Free Cash Flow (M) | $2,248 | $2,355 | $3,197 | $3,732 | $4,836 | $4,693 |
| CAPEX (M) | $76 | $59 | $53 | $157 | $210 | $191 |
| EV / EBITDA | 30.93 | 31.66 | 49.75 | 48.57 | 54.32 | 53.81 |
| Total Debt (M) | $423 | $2,357 | $2,037 | $7,484 | $5,879 | $6,623 |
| Net Debt / EBITDA | -0.59 | -1.19 | -0.31 | 1.94 | 1.26 | 0.99 |
| Current Ratio | 1.8 | 3.09 | 2.1 | 1.37 | 1.25 | 1.24 |
Intuit has rapidly growing revenues and increasing reinvestment in the business and generally positive cash flows. Additionally, the company's financial statements display positive EPS growth and healthy leverage levels. Furthermore, Intuit has decent operating margins with a stable trend and just enough current assets to cover current liabilities, as shown by its current ratio of 1.24.
