Intuit Stock: Compounding with World-class Software - $INTU

Using 10-years of financials, I analyze Intuit stock's valuation and business quality from a value investing framework. (Income Statement, Balance Sheet, and Cash Flow Statements)
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I analyze Intuit, stock ticker: $INTU in a 12 minute video focused on fundamental stock analysis. My goal is to quickly determine whether this is a high-quality company worth investing in.
In addition, I provide a stock valuation analysis breaking down the current stock price compared to my target stock price for Intuit stock.
QuickFS.net is used to quickly analyze the company's business description, rates of return, growth rates, and business fundamentals. I discuss the balance sheet, cash flow statement, and income statement to provide a holistic overview of the stock in five minutes or less.
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[@awaite1980]

Never would have known they were hurting their stock buybacks with stock compensation to employees. Thanks for showing that!

[@DIYInvesting]

You’re welcome

[@Klayhamn]

isn't that the case for literally every big tech company?

[@ronaldmadena4746]

Thanks bro! Please cover AQST stock if you can as well. They are making all types of medicine in the listerine strip and just got a $12 price target on a stock that’s not even 3 bucks. They also have an FDA coming up in a few months.

[@fatlipzjr9030]

Also interested in AQST

[@UrbanJournal]

Great video overview of INTU.

[@DIYInvesting]

Thanks

[@julieargon]

Are you planning to attend SantaCon in NYC for GME? There's a big gathering in a few weeks, and everyone is dressing up for GameStop. I look forward to potentially meeting you there! It's anticipated to be an exciting few weeks for GameStop! Additionally, GameStop stock currently has a 90 short squeeze score, the highest since 2021…

[@DIYInvesting]

🧐

[@julieargon]

@@DIYInvesting we’ll see what happens. If you do go I’d love to meet ya❤️

[@airgetmar1928]

Was wondering if you could do a video on VECO stock?

[@ZakDzns]

Can I suggest you do Kazatomprom? Biggest Nuclear miner company

[@DIYInvesting]

I won’t have any useful insight for you on that one

[@manemrob1510]

Spot on.

[@DIYInvesting]

👍

[@salehalotaibi2903]

Great company only problem it's high valuation

[@DIYInvesting]

👊

[@AlanMwatson-xyz]

They have these large D&A items suppressing the net income in FY22-23. P/E when normalizing by their prior 22% profit margin is a more modest 50 :) But anyway, I don't know what people are thinking when they hold onto these names at these valuations. The share price is 7.5x over the past decade: 3x from revenue growth via dilutive acquisitions and 2.5x from multiple expansion. The former is not sustainable and the latter will be wiped out in the next crash. As for the business model: in European countries, Spain in particular, you don't even prepare a tax return yourself - the tax agency (just like the IRS) already knows nearly everything about you, so instead of having you file a return, it is them sending it to you, so that all the taxpayer has to do is confirm whether the agency's records are missing anything, which for the vast majority of people isn't the case. So there is no tax prepping middle man bribing the government to make sure that everythig stays the way it is so that they can continue to suck money out of taxpayers. I guess the market loves you, until it doesn't.

[@davidcherve]

In Spain there are many, many so called "gestorías", where clerks charge people with micro businesses and some families for filling their taxes. Many, many people "earn" a living by doing this.

[@AlanMwatson-xyz]

@@davidcherve People can choose to be stupid and ignorant all they want. In Spain, the government sends you a tax return draft. If you feel that you need to pay somebody else to review it or amend it, it is up to you, but it is a choice after all, and most people with simple 9-5 jobs don't need that. In the US, the IRS (despite having access to the same information the Spanish agency has) is lobbied into not sending you anything, so people (who are likely even more stupid and ignorant) are essentially all forced to use these services, which are only "free" for very basic returns and provide Intuit's conglomerate with invaluable data. If the IRS sent everybody a tax return draft like the Spanish agency does, Intuit's business model wouldn't be nearly as juicy as it is today, and this is something that simple regulation could address, so paying 50x earnings for an unnecessary piece of software that performs trivial additions and subtractions and that is forced into people's lives through lobbying power seems very questionable.

[@DIYInvesting]

👊

[@herospeedy3174]

if America ever decides to do it the way eu countries do, then intuit will be wiped out.

[@hyperhippyhippohopper]

It's not surprising for a company to start ramping up stock-based compensation when the stock is trading at a very high earnings multiple. If you can save a lot of operating cash by paying out your employees in stock options instead, your employees will be happy to exercise them on the open market since it's way over-valued right now. Buying back shares is actually the dumb thing to do at these valuations. If you don't want to buy overvalued shares, why should the company? The low returns on invested capital in recent years are the result of this practice. I like the business overall, but I don't like the bad capital allocation by the management. I'm skipping this one until the entire management team gets replaced by people who know what they're doing.

[@DIYInvesting]

While it’s not surprising, it sets a bad precedent. I think it’s much easier to ramp up stock comp than ramp it down. It’s even easier to simply stick to a policy of zero stock compensation.

[@hyperhippyhippohopper]

@@DIYInvesting Modest stock-based comp is actually a good thing. When employees are fellow shareholders, they have skin in the game. Everybody including the staff wants the company to do well, so they'll work harder to make it happen. When you overdo it, it becomes a problem. Ideally you want to see SBC go up evenly with the number of employees in the company, not in concert with earnings/revenue etc.