Intuit's Stock Is Still Enticing, Even After A Big 2-Year Run

Argus said in a Wednesday note that Intuit Inc. INTU shares continue to trade at attractive valuation despite a strong run the past two years. Accordingly, the firm initiated coverage of Intuit at Buy with a $165 price target.

Analyst Jim Kelleher believes the rise of entrepreneurial economy and the demise of large-company employment will drive accelerating growth in accounting and tax products for small businesses and the self-employed.

"Intuit has numerous programs in place to stimulate growth of its ecosystem, including bundling TurboTax and QuickBooks for its self-employed and SMB customers and linking business owners to top local accountants," the analyst said.

Kelleher is of the view that Intuit is well-positioned for above-market growth in accounting products, namely QuickBooks, and steady growth in tax-preparation products such as TurboTax.

Argus, though believing tax reform remains a real possibility, doesn't expect a tax simplification scheme that could reduce the role of professional tax preparers and use of tax preparation software.

See Also: Here's What Happened Last Time The U.S. Implemented Major Corporate Tax Reform

The firm believes tax preparations and QuickBooks stand to benefit from new products such as One Intuit ecosystem, to drive growth. Additionally, the firm noted the company is promoting its QuickBooks and TurboTax self-employed bundle. On the professional front, the firm noted the ProConnect business focuses on multi-service accounting firms that do both books and taxes.

Argus also suggested one significant total addressable market, or TAM, driver for Intuit is to expand the prospect pool overseas, with particular focus on six nations, namely Canada, U.K., Australia, Brazil, France and India. These factors along represent a $50 billion-plus TAM, the firm said.