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Analysis on Intuit Stock
Intuit is a stock I have been watching for quite awhile. They own some absolutely amazing companies that I personally use, and I have been debating purchasing shares of this company for quite some time. Some iconic brands that they own that I am also a fan of are Quickbooks which is an amazing tool for small businesses, TurboTax which is an amazing tool for taxes, Mint a personal finance tool that I personally use for budgeting, CreditKarma which helps people with their credit score, and Mailchimp which you will see a subscription form for below as Finance by CWT personally uses them. All of these services have one thing in common, I believe they are in a good position for even more growth.
Shares of Intuit currently sell at a pretty hefty premium. They trade at 44.08 times their earnings. While that is a pretty large p/e ratio, it is important to realize that they are growing their revenue at pretty large rates. In 2019, revenue for Intuit rose by 12.6% followed by a rise of 13% in 2020, and 25% in 2021. This is a pretty large revenue increase which helps justify the hefty valuation. Intuit currently has a valuation of almost 110 billion dollars.
Intuit does offer a small dividend of .70% which is actually pretty large for a high growth company like Intuit. Intuit has a really high price to book ratio at 6.42. They also have a high price to sales ratio at 8.48 which is not ideal considering that a p/s ratio of around 1-2 is what is considered good.
Intuit is trading at a very high valuation but it is growing very quickly, and if it continues to grow very quickly, then buying the stock at a very high valuation will become a justified valuation in the future.
While I love the businesses under Intuit and want to own them, I do believe the stock is currently overvalued and will personally be waiting for the stock to fall a little bit more before I am willing to buy it. I do think that this company could be a good long-term play, so I will be watching the stock for awhile more and hoping it gets to a price that I am more comfortable with.
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