Intuit stock price target raised to $850 at RBC Capital

Intuit (INTU) saw its shares jump 8% after hours following a strong Q3 fiscal 2025 earnings report, driven by a robust tax season and growth in its Global Business Solutions. RBC Capital raised its price target to $850 from $760, maintaining an Outperform rating, while Jefferies also increased its target to $850 from $735. The company reported revenue of $7.754 billion, a 15% year-over-year increase, and non-GAAP EPS of $11.65, both exceeding consensus estimates, leading Intuit to raise its fiscal year 2025 revenue growth guidance to 15%.

Analysis

Intuit (INTU) reported robust financial results for its third fiscal quarter of 2025, with shares climbing 8% in after-hours trading. The company announced revenue of $7.754 billion, a 15% year-over-year increase that surpassed the consensus estimate of $7.568 billion, and non-GAAP earnings per share of $11.65, an 18% year-over-year growth, exceeding the $10.93 consensus. This strong performance was attributed to a successful tax season, momentum in its Global Business Solutions (GBS) segment, and robust growth in Credit Karma, which saw a 31% revenue increase, although some revenue from this segment was characterized as lower-quality. Despite this, overall profitability and impressive gross profit margins of 80.26% exceeded market expectations. Trailing twelve-month revenue stands at $18.18 billion. Consequently, Intuit upgraded its fiscal year 2025 guidance, now projecting 15% revenue growth, up from the previous 12-13%, with Q4 projections also surpassing analyst forecasts. Analyst sentiment is strongly positive, evidenced by RBC Capital raising its price target to $850 from $760 and maintaining an Outperform rating, and Jefferies increasing its target to $850 from $735 with a Buy rating. Additionally, 20 analysts have recently revised their earnings estimates upward. Intuit's strategic focus on AI-driven innovations and product expansions is a key driver, with plans to introduce new AI-featured products expected to command higher prices. InvestingPro analysis indicates Intuit's financial health is "GREAT," though it also suggests the stock is currently trading above its Fair Value.

Key Decisions for Investors

• Investors should consider the strong quarterly performance, upwardly revised full-year guidance, and positive analyst sentiment as supportive of a bullish outlook for Intuit.
• Monitor the development and market adoption of Intuit's upcoming AI-powered products, as these are positioned as significant future growth catalysts and may influence pricing power.
• Evaluate the current valuation carefully, given InvestingPro's assessment that the stock is trading above its Fair Value, and continue to assess the quality and sustainability of revenue contributions from segments like Credit Karma despite its strong growth.