QUOTE AND NEWS
Jutia Group  Oct 21  Comment 
[Business Wire] - Intuit Inc.’s QuickBooks Connect opens this week, attracting thousands of accounting professionals, small businesses, entrepreneurs and developers looking to take the Read more on this. Intuit Inc. (INTU), valued at $23.46B,...
Market Intelligence Center  Oct 17  Comment 
After Thursday’s trading in Intuit Inc (INTU) MarketIntelligenceCenter.com's patented algorithms uncovered a trade that offers a 4.96% return or 19.67% on an annualized basis (for comparison purposes only), while providing 6.10% downside...
Market Intelligence Center  Oct 6  Comment 
MarketIntelligenceCenter.com’s patented algorithms have chosen the Jan. '15 $85.00 call for a couple of hedged-trading ideas on Intuit Inc (INTU). A traditional covered call on Intuit yields 4.86% (17.22% annualized, for comparison purposes...
Benzinga  Oct 2  Comment 
Analysts at Bank of America downgraded Owens-Illinois (NYSE: OI) from Buy to Neutral. The target price for Owens-Illinois has been lowered from $38 to $29. Owens-Illinois shares closed at $25.88 yesterday. Analysts at Evercore Partners...
Benzinga  Oct 1  Comment 
In a report published Wednesday, Morgan Stanley analyst Jennifer Swanson Lowe reiterated an Underweight rating and $72.00 price target on Intuit Inc. (NASDAQ: INTU). In the report, Morgan Stanley noted, “Last year's analyst day highlighted...
Forbes  Sep 25  Comment 
The most recent short interest data has been released by the NASDAQ for the 09/15/2014 settlement date, and we here at Dividend Channel like to sift through this fresh data and order the underlying components of the Nasdaq 100 by "days to cover."...
Jutia Group  Sep 22  Comment 
[Business Wire] - Intuit Inc. has called journalist, television personality and entrepreneur Giuliana Rancic to the main stage to speak at QuickBooks Connect, taking place on Wednesday, October, 22nd in San Jose, Calif. Read more on this. Intuit...
SeekingAlpha  Sep 19  Comment 
By Time & Model: It is said there are only two certainties in life: death and taxes. The author John Brooks paints an intriguing picture of the latter situation in chapter 3 of Business Adventures. We can bet demand for tax-related services is...
Jutia Group  Sep 18  Comment 
[Business Wire] - Small business can mean big business to developers this fall at QuickBooks Connect. Today, Intuit announced that participants in the QuickBooks Connect Hackathon will get the chanc Read more on this. Intuit Inc. (INTU), with a...
Benzinga  Sep 16  Comment 
Analysts at RBC Capital initiated coverage on Intuit (NASDAQ: INTU) with a Outperform rating. The target price for Intuit is set to $105. Intuit shares have gained 26.87% over the past 52 weeks, while the S&P 500 index has jumped 16.88% in...




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS

Intuit Inc. (NASDAQ:INTU) develops financial software targeted at individuals and small businesses. Over 80% of its revenue comes from its three main products: TurboTax, a tax preparation software available in both online and in stores,Quicken, a personal finance tool, and Quickbooks, a small business accounting software. TurboTax and Quickbooks dominate their respective fields, with TurboTax owning 39% of the retail tax preparation software market, and Quickbooks holding 89% of the small business accounting software market.[1] The company earned $3.18 billion in revenue and $447 million in net income in 2009.[2]

Intuit's strategy has been to focus on customer satisfaction and simplifying the user experience. Despite the strong performance of its two major products, the company spends 80% of its R&D budget on the continued development of Quickbooks and TurboTax. The company has also positioned itself to be a major player in the growing online market, with TurboTax and Quickbooks both offering online editions. The recent acquisition of Digital Insight (a provider of online banking services) and pending launch of FinanceWorks plays into this strategy as well. However, the online market for tax preparation has become more competitive than the retail one, and recent server problems have damaged TurboTax's credibility, a concern for a company focused on user experience. To maintain growth, the company will have to continue satisfying current customers with new product cycles and add-in services, as well as fend off low-cost competition online.

Company Overview

Intuit has five business segments that it divides into four categories:[3]

  • Small Business Group - consists of Financial Management Solutions (formerly QuickBooks), Employee Management Solutions (formerly Payroll), and Payments Solutions.
  • Tax - consists of Consumer Tax and Accounting Professionals.
  • Financial Institutions - consists of outsourced online services for banks and credit union.
  • Other Business - consists of Quicken, Real Estate Solutions, and the company's businesses in Canada and the United Kingdom.

Products[4]

  • Financial Management Solutions - brings bookkeeping capabilities and business management tools to small and medium-sized business users in an easy-to-use design that does not require them to be familiar with debit and credit accounting. The company's desktop software products include QuickBooks Simple Start, which provides accounting functionality suitable for very small, less complex businesses and is offered in both free and paid versions.
  • Employee Management Solutions - QuickBooks Payroll is a family of products sold on a subscription basis to small businesses that use QuickBooks and prepare their own payroll or want some assistance with preparing their payroll. It is also sold to accountants who use QuickBooks and help their clients manage their payrolls.
  • Payment Solutions - the company offers merchant services, which include credit card, debit card, electronic benefits, and gift card process services, check verification, check guarantee, and electronic check conversion. This category also consists of QuickBooks point of sale solutions.
  • Consumer Tax - TurboTax products and services are designed to enable individuals and small business owners to prepare and file their own federal and state personal and small business income tax returns quickly and accurately. They are designed to be easy to use, yet sophisticated enough for complex tax returns.
  • Accounting Professionals - provides software and services for accountants and tax preparers in public practice. These include offerings that help professional accountants and tax preparers provide accounting, payroll, tax planning and tax compliance services to their individual and business clients, and that help them manage their own practices more effectively.
  • Financial Institutions - the company's Digital Insight business provides outsourced online banking offerings that are hosted in our data centers and delivered as on-demand services to small and medium-sized financial institutions.
  • Other Businesses - Quicken line of desktop software products helps users organize, understand and manage their personal finances. Quicken allows customers to reconcile bank accounts, pay bills, record credit card and other transactions, and track investments, mortgages and other assets and liabilities. Intuit Real Estate Solutions business offers software and related technical support, consulting and training services for residential, commercial and corporate property managers.

Business Growth

FY 2009 (ended July 31, 2010)[2]

  • Net revenue increased 13% to $3.46 billion.

Intuit said its small business division showed 16 percent growth, and gained customers through its QuickBooks and Intuit Websites products.

The company also said that personal finance management site Mint.com ended the quarter with more than 3 million users.

Trends and Forces

Seasonal Returns

Due to the nature of tax season and the annual product release cycle, the performance of Quickbooks and TurboTax is highly seasonal. Traditionally, Intuit has reported strong earnings in the second and third quarters of the fiscal year (1/31 through 7/31), while posting losses in Q1 and Q4.

The Internet

While retail still comprises the majority of TurboTax sales (5.5 million units, versus 5.2 million paid federal units online), TurboTax Online is growing much faster. The company's acquisition of Digital Insight and the pending release of their online banking software is another move towards capitalizing on the emerging online financial market, as consumers become more comfortable with conducting financial transactions online.

This new market has also provided new challenges. While the retail version of TurboTax has a sizable cost advantage over professional tax preparation firms, it faces considerable price competition online, where lower startup costs and fewer barriers to entry have allowed a number of low-cost competitors to enter the field. Online filing is also vulnerable to changing user filing habits, with more and more customers filing later in the season (a trend that has been noted industry-wide).

Competition

TurboTax faces a wide variety of competitors in a fragmented tax preparation market. With H&R Block's TaxCut software as its only direct competitor, TurboTax dominates the retail market with four copies sold for every copy of TaxCut, despite TaxCut's lower cost. TurboTax also has a retention rate of around 75%, and thus most competition with TaxCut is over new users.

Online, TurboTax is facing increasing pressure from TaxCut, as well as ad-supported TaxACT and other low-cost competitors. TurboTax also competes indirectly with traditional tax preparation services, such as H&R Block (HRB), Jackson-Hewitt, CPAs, and local mom-and-pop accounting services. Traditional services still account for the majority of tax returns filed, despite the cost advantage of TurboTax and other DIY methods.

Quickbooks is also dominant in its field, where its only real competition is Peachtree Software. Microsoft (MSFT) was expected to pose a threat, with its Small Business Accounting software bundled at no cost with versions of its popular Office suite.

Intuit is most focused on targeting non-consumers, i.e., tax filers and small businesses who still prefer to work with a pencil, paper, and spreadsheet. With its growth strategy focused beyond its immediate competitors to capturing customers from the larger market of imperfect substitutes, the company does not attempt to compete using price leverage. TurboTax carries a price premium over TaxCut, and the standalone version of Small Business Accounting is less than half the price of the cheapest Quickbooks offering.

References

  1. INTU 2009 10-K "General" pg. 3
  2. 2.0 2.1 INTU 2009 10-K "Five-Year Summary" pg. 31
  3. INTU 2009 10-K "Our Business Portfolio" pg. 4
  4. INTU 2009 10-K "Products and Services" pg. 5-8
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki