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Long Trade Idea
Enter your long position between $315.51 (the intra-day high of its last bearish candlestick) and $325.68 (an intermediate horizontal resistance level).
Market Index Analysis
Intuit (NASDAQ:INTU) is a member of the NASDAQ 100 Index, the S&P 100 Index, and the S&P 500 Index.
All three indices trade near all-time highs, driven by an AI frenzy reminiscent of the 1700s French stock market.
The Bull Bear Power Indicator for the NASDAQ 100 Index is bullish with a negative divergence.
Market Sentiment Analysis
Equity markets enter the final trading week near all-time highs, and the start of the week is bullish as oil prices dropped towards $90 per barrel amid hopes of a deal despite mixed messaging from the US and Iran. Consumer confidence continues to retreat, while borrowing costs are at decade highs. Earnings from Marvell Technology, Salesforce, Costco Wholesale, Dell Technologies, Dollar Tree, Best Buy, and The Gap are on deck.
Intuit Fundamental Analysis
Intuit is a business software company best known for its small business accounting software, QuickBooks. Other leading services include TurboTax, its e-mail marketing platform Mailchimp, and its credit monitoring service Credit Karma.
So, why am I bullish on INTU following its earnings release?
Intuit reported revenues of $8.56 billion and earnings per share of $12.80, ahead of expectations calling for $8.54 billion and $12.57, respectively. It also increased its full-year guidance, driven by its AI-powered Expert Platform, including the Intuit Enterprise Suite tailored to mid-market businesses, which is experiencing 30%+ growth rates. Institutional buying, low valuations, and a 17% workforce reduction add bullish catalysts.
Metric | Value | Verdict |
P/E Ratio | 19.53 | Bullish |
P/B Ratio | 4.24 | Bearish |
PEG Ratio | 0.83 | Bullish |
Current Ratio | 1.45 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
Intuit Fundamental Analysis Snapshot
The price-to-earnings (P/E) ratio of 19.53 makes INTU an inexpensive stock. By comparison, the P/E ratio for the NASDAQ 100 Index is 35.89.
The average analyst price target for INTU is $522.02. This suggests excellent upside potential with manageable downside risk.
Intuit Technical Analysis
Today’s INTU Signal
The INTU D1 chart shows price action inside a horizontal support zone.
It also shows price action just below its descending Fibonacci Retracement Fan levels.
The Bull Bear Power Indicator is bearish and below its ascending trendline, hinting at more short-term volatility potential.
The average bearish trading volumes are higher than the average bullish trading volumes, but bulls have bought the post-earnings dip.
INTU dropped as the S&P 500 Index remained near all-time highs, a bearish signal, but breakout indicators are rising.
My INTU Long Stock Trade
INTU Entry Level: Between $315.51 and $325.68
INTU Take Profit: Between $390.50 and $407.76
INTU Stop Loss: Between $280.99 and $295.37
Risk/Reward Ratio: 2.17
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