In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Intuit INTU alongside its primary competitors in the Software industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to investors and shed light on company's performance within the industry.
Intuit Background
Intuit is a provider of small-business accounting software (QuickBooks), personal tax solutions (TurboTax), and professional tax offerings (Lacerte). Founded in the mid-1980s, Intuit controls the majority of U.S. market share for small-business accounting and DIY tax-filing software.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Intuit Inc | 71.97 | 10.83 | 12.60 | 1.41% | $0.53 | $2.22 | 14.67% |
| Salesforce Inc | 109.94 | 4.82 | 8.39 | 2.11% | $2.42 | $6.57 | 11.27% |
| Adobe Inc | 51.12 | 16.53 | 14.29 | 9.18% | $2.06 | $4.41 | 11.56% |
| SAP SE | 54.02 | 4.47 | 6.23 | 2.75% | $2.23 | $6.2 | 9.34% |
| Synopsys Inc | 71 | 13.95 | 14.94 | 5.77% | $0.48 | $1.27 | 24.51% |
| Cadence Design Systems Inc | 78.71 | 24.04 | 20.05 | 9.94% | $0.41 | $0.96 | 4.45% |
| Workday Inc | 1259.29 | 12 | 11.36 | 1.76% | $0.23 | $1.42 | 16.67% |
| Roper Technologies Inc | 42.49 | 3.32 | 9.41 | 2.26% | $0.72 | $1.13 | 3.2% |
| Autodesk Inc | 61.83 | 37.84 | 10.62 | 17.93% | $0.37 | $1.29 | 10.47% |
| Palantir Technologies Inc | 279.89 | 15.77 | 26.02 | 2.8% | $0.11 | $0.5 | 8.99% |
| Datadog Inc | 972.50 | 22.09 | 22.41 | 2.82% | $0.07 | $0.48 | 7.69% |
| Ansys Inc | 59.67 | 5.73 | 13.35 | 1.12% | $0.11 | $0.39 | -2.9% |
| Splunk Inc | 223.86 | 130.89 | 6.44 | 121.15% | $0.14 | $0.86 | 14.8% |
| PTC Inc | 91.24 | 7.70 | 9.91 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 84.39 | 2.63 | 4.35 | 1.96% | $0.2 | $0.87 | 3.16% |
| Tyler Technologies Inc | 118.95 | 6.50 | 9.76 | 1.67% | $0.11 | $0.23 | 4.54% |
| AppLovin Corp | 167.50 | 14.55 | 5.71 | 8.25% | $0.31 | $0.6 | 21.2% |
| Dynatrace Inc | 79.94 | 8.16 | 11.50 | 2.3% | $0.05 | $0.3 | 22.74% |
| Manhattan Associates Inc | 88.22 | 55.04 | 16.77 | 19.96% | $0.06 | $0.13 | 20.27% |
| Bentley Systems Inc | 93.80 | 22.08 | 14.21 | 7.94% | $0.1 | $0.24 | 14.27% |
| NICE Ltd | 45.58 | 4.42 | 6.42 | 2.89% | $0.16 | $0.41 | 8.4% |
| Average | 201.7 | 20.63 | 12.11 | 11.35% | $0.53 | $1.44 | 11.64% |
After examining Intuit, the following trends can be inferred:
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A Price to Earnings ratio of 71.97 significantly below the industry average by 0.36x suggests undervaluation. This can make the stock appealing for those seeking growth.
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Considering a Price to Book ratio of 10.83, which is well below the industry average by 0.52x, the stock may be undervalued based on its book value compared to its peers.
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The Price to Sales ratio of 12.6, which is 1.04x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a lower Return on Equity (ROE) of 1.41%, which is 9.94% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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With Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $530 Million, which aligns with the industry average, the company exhibits comparable profitability and operational efficiency in the market.
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The gross profit of $2.22 Billion is 1.54x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 14.67% exceeds the industry average of 11.64%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing Intuit against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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When comparing the debt-to-equity ratio, Intuit is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.38.
Key Takeaways
Intuit's low PE and PB ratios suggest that the company's stock is undervalued compared to its peers in the software industry. However, its high PS ratio indicates that investors are willing to pay a premium for the company's revenue. Intuit's low ROE suggests that the company is not generating significant returns on its shareholders' equity. The company's equal EBITDA and high gross profit indicate stable financial performance. Additionally, Intuit's high revenue growth suggests that the company is experiencing strong sales growth compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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