The onset of the novel coronavirus has truly thrown people and businesses for a loop. Paying taxes on time has become more difficult, and investors in Intuit (NASDAQ:INTU) might wonder how this will impact the company along with the INTU stock price.
That’s a valid question, but there are reasons to believe that Intuit can weather the economic storm. Intuit, whose flagship products are the popular accounting software products known as QuickBooks and TurboTax, has demonstrated resilience during in the face of pandemic-induced upheaval.
Even with delays in tax returns, Intuit’s data indicates that the company is doing just fine. Besides, the company is taking action to ensure its continued viability as a leader in the fintech space.
INTU Stock at a Glance
Over the long term, INTU stock has rewarded patient shareholders handsomely. For one thing, Intuit has faithfully and consistently increased its dividend payouts every year since 2011. And with the shares having broken through the $300 level recently, one could have bought the stock at practically any price point and made substantial gains with a buy-and-hold strategy.
Moreover, by early July, any price depreciation resulting from the coronavirus crisis was fully recovered. In hindsight, the brief share price drop below $200 in March was a terrific buying opportunity.
If $200 was great, what about $300? A solid company deserves your attention even if you’ve missed the chance to get in at the bottom. And if you’ve stayed in the trade for a while, the data suggests that more gains in INTU stock are most likely right around the corner.
A Taxing Situation
Hardly anybody outside of the Internal Revenue Service actually likes taxes. It could be argued that Intuit and its investors benefit from tax season, though. After all, QuickBooks and TurboTax have been reliable seasonal revenue generators year after year.
But what about 2020, a year in which many businesses and individuals simply weren’t able to pay their taxes on time? As you may already know, the IRS extended the tax deadline for people and businesses from April 15 to July 15.
Along with that, it’s certainly possible that there will be a spike in the number of applications for tax-filing deadline extensions. This could precipitate strong demand for Intuit’s accounting software through the remainder of the summer at least.
Additionally, it should be noted that Intuit is taking steps to enhance its bottom line. First of all, Intuit recently announced that the company has laid off 715 of its employees. This is unfortunate for the impacted workers, but it’s a cost-cutting measure that should help to strengthen Intuit’s balance sheet.
Furthermore, Intuit revealed that the company intends to acquire Credit Karma, a personal finance portal. This buyout should augment Intuit’s already considerable market share in the personal finance space.
A Shift in Time
As we might expect, the coronavirus-induced tax filing delays had an impact on Intuit’s third-quarter fiscal results. Thus, the company’s quarterly consumer-group segment revenues of $1.8 billion may have disappointed some stakeholders.
This figure, however, reflects a “shift of a significant portion of tax filings and related revenue out of the third quarter and into the fourth quarter” as Intuit “expects more of its customers with complex returns to file later in the extended season.”
The company furthermore expects its “TurboTax Online share and average revenue per customer” to “remain on track” for the delayed tax season. Consequently, INTU stockholders should prepare for a positive outcome during the company’s fourth quarter.
It’s also worth noting that the Intuit’s third quarter had some bright spots. For example, the company’s small business and self-employed segments posted $1 billion in quarterly revenues, indicating an 11% increase. In addition, the small business online ecosystem segment’s quarterly revenues grew by 28%.
The Final Word
Are taxes delayed necessarily taxes unpaid? Not likely, as the IRS is an unstoppable force. Even with the pandemic creating havoc, Intuit’s accounting software will still be in demand and INTU stock’s ascent should remain unimpeded.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.