Deutsche Banks Still Buying Intuit After A 'Clean' Q4 Beat

Intuit Inc. INTU's "clean" earnings beat in its fourth-quarter results reaffirmed the bullish case for owning the stock, analysts at Deutsche Bank commented in a research report. Analyst Nandan Amladi maintains a Buy rating on Intuit's stock with an unchanged $150 price target.

In addition to a top and bottom-line beat, Intuit ended fiscal 2017 with 2.4 million subscribers, which exceeded management's own target of 2.3 million users. Looking forward to fiscal 2018, the company expects to boost its subscriber base to 3.3 million users, which implies a 40 percent year-over-year growth. The analyst believes this figure actually may be conservative and there is room to the upside.

Intuit's QBO ecosystem gained momentum throughout fiscal 2017 and the outlook for 2018 is consistent and implies "impressive" growth at this scale, the analyst said.

Meanwhile, the competitive landscape from peers including Xero "abated a bit," especially at the lower-end of the market where QBO SE is "growing relatively unencumbered," Amladi said. Also, QB Enterprise continues to grow while the SmartLook feature in TurboTax could prove to be a disruptive force for tax prep firms.

Bottom line, Intuit's solid execution in the quarter coupled with a clear path towards continued growth reaffirms the stock's upside potential to $150 per share.

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