INTU - Intuit Should Burn Off Its Rally It Likely Doesn't Deserve Such A High Premium

2024-07-04 22:53:32 ET

Summary

• Intuit's share prices has soared nearly 50% over the past year, a reflection of the company's recent growth spurt driven by its assisted offering, TurboTax Live.
• However, the consumer tax season is now behind us, and Intuit has to justify trading at a ~35x forward P/E ratio with few growth catalysts still under its belt.
• The small business segment has performed well with consistent high-teens growth, but other software peers have noted elevated SMB churn, which may pose a threat to Intuit as well.

As the stock market continues to hover near all-time highs, investors have to be especially careful of high-valuation stocks that stand to crumble at the slightest whiff of unfavorable interest rate policy or macroeconomic news. I'm rotating more and more of my portfolio out of high-quality growth names and more into an assortment of cash and "growth at a reasonable price" stocks....

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