3. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 75
Intuit Inc. (NASDAQ:INTU) is a California-based company specializing in financial management and compliance products and services in the United States, Canada, and internationally. The company operates through four segments – Small Business & Self-Employed, Consumer, Credit Karma, and ProConnect. George Soros’ hedge fund boosted its Intuit Inc. (NASDAQ:INTU) stake by 24% in Q2 2022, holding 76,574 shares worth $29.5 million.
After Intuit Inc. (NASDAQ:INTU) revealed that Credit Karma has experienced more deterioration during the last few weeks of the first quarter, but at the same time reported that Q1 results are forecasted to be ahead of guidance and reaffirmed its full-year FY23 operating income and EPS guidance, Morgan Stanley analyst Keith Weiss said that this pre-announcement raises confidence in the primary business, despite Credit Karma and Mailchimp weakness. Reiterating FY23 targets indicates management’s commitment to achieving profitability, “which should be rewarded by investors,” added the analyst, who maintained an Overweight rating and a $550 price target on Intuit Inc. (NASDAQ:INTU) shares on November 2.
According to the second quarter database of Insider Monkey, 75 hedge funds were long Intuit Inc. (NASDAQ:INTU), compared to 82 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the biggest stakeholder of the company, with 2.3 million shares worth $914 million.
Here is what RiverPark Large Growth Fund has to say about Intuit Inc. (NASDAQ:INTU) in its Q3 2022 investor letter:
“We took advantage of its 2022 price decline to add a small position in Intuit. INTU is a leading SaaS software solutions provider to small businesses, consumers, and professional accountants, best known for its QuickBooks accounting and TurboTax tax preparation platforms. INTU recently strengthened its personal finance offerings with the acquisitions of Mint and Credit Karma, and its small business offering with the acquisition of email marketing platform Mailchimp. The company is benefitting from the secular shift to digitization for both businesses and consumers. Given its vast amount of valuable personal finance and tax customer data from its 100 million + customer installed base, the company can apply artificial intelligence to the data to generate actionable intelligence for customers, as well as a large cross-selling opportunity across its products.
Given INTU’s less than 5% penetration of its $300 billion market, we believe the company can grow its top-line mid-teens, while improving its high-margin business model of greater than 80% gross margins and greater than 35% EBITDA margin, leading to high-teens EPS growth for the foreseeable future. At about 2% of revenue, the company also requires limited capital expenditures, producing significant and growing FCF, which INTU has used for acquisitions, a small dividend, debt repayment and stock buybacks.”
