INTU share price outperformance

The INTU share price is special amongst leading stocks in the sense that it has not only fully recovered from the February – March 2020 decline, but is now trading well above initial 2020 highs.

This is all the more impressive given the way that the company is not one of the high profile FAANGS, but nevertheless has developed the kind of momentum of the best of them, like Facebook and Amazon.

In fact, with its accounting and tax software, we have a company which is clearly an evergreen in terms of the economic cycle.

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INTU shares pandemic winner

Even a pandemic cannot really get in the way of paying tax for consumers. Therefore, we have in this company which combines two of the greatest buzzword concepts of the Cloud, and software as a service (SaaS).

The characteristics of a company’s revenue stream from SaaS is very much in the steady category, rather than blow the lights out. This may sound dull, but during the COVID-19 era investors will be grateful for consistency, rather than volatility in earnings.

 

Intuit share price Q4 update

The point was underlined at the time of Intuit shares Q4 update at the end of August. This was clearly the key post pandemic update, and it did not disappoint. Indeed, quite the opposite. Intuit has made a habit of beating consensus expectations.

However, the extension of the US tax year, and the need by many to file their taxes at home online, rather than through a third party in person, meant that Intuit said it had its best quarter in 15 years.

The Q4 2020 revenue rise of 83% was something that few could anticipate. The issue now is perhaps how much Intuit can build on these unique early 2020 gains, something we shall find out via the Q1 2021 update from Intuit on November 19.

To see all upcoming news and data releases that’ll have an effect on the financial markets, check out our Economic Calendar. It’ll cover all major releases from global economies and give you the exact time the release is due, the previous data, forecast data and actual data (once released).

 

INTU shares outperform

The irony as far as the INTU share price performance is that while it has been strong, it may be argued that it still pales into insignificance as compared to the rising fundamental metrics over the past year.

The point is highlighted by the way that the company has swung from a 9 cents a share loss versus $1.18 in the past quarter. True, the onset of the pandemic managed to catch out analysts causing Intuit to massively outperform.

What will be interesting to see at the next update where the earnings consensus of just 5 cents a share appears to be something it will be very difficult for Intuit not to beat. This is even though the skew in earnings at the company is towards Q3. Last year’s 4.1 cents a share at Q1 compares to the estimates for this year’s first quarter at 4 cents.

 

INTU share price 2020 momentum

Given the momentum in the latter half of 2020, and the way it is unlikely that this momentum will be extinguished until the pandemic is over, it is probable that as in the case of most recent quarters analysts will be under-estimating the Intuit share price performance.

One would then expect this positive surprise to lead to further share price strength, especially as the stock has tended to be more sensitive to the fundamentals than analysts.

 

How to trade shares with ATFX

Looking to trade Intuit shares and other major company shares? Open a live or demo account with ATFX to get up to speed. Start trading now to benefit from competitive spreads, high-quality trade execution, and no commission.

1. Register for an account or log in to your existing account

2. Open MT4 either on your desktop or mobile

3. Search for Intuit shares in the market watch or symbols window

4. Choose your position size

5. Hit buy or sell, and then confirm the trade

 

INTU share price daily

Daily chart analysis showing Intuit share price daily movements for 2020

 

Risk management

Looking to learn more about risk management and how it can benefit your trading? Check out our Risk and reward ratio article for more insight.

Take the opportunity to develop your risk management strategy. Understand five key risk management techniques to help you look after your funds.

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