Intuit stock forecast ahead of earnings: will it jump or crash?

Intuit stock price has moved sideways in the past few days as investors wait for its financial results, which will provide more information about its business amid the fears of AI disruption.

INTU, the biggest accounting software company in the world, was trading at $403, down from the all-time high of $812. 

Intuit to publish its financial results

INTU stock price has come under pressure in the past few months, mirroring the performance of other top software companies.

It has crashed amid concerns that some of its business will be disrupted by artificial intelligence tools made by companies like Anthropic, Rillet, Basis, and Numeric. 

The stock has also retreated because of the ongoing slowdown of Mailchimp, a company it acquired a few years ago. 

Still, the most recent results showed that the company’s business was doing relatively well despite these fears.

These numbers revealed that its revenue jumped by 17% to $4.7 billion, with its Global Business Solutions rising by 18% to $3.2 billion. 

The Online Ecosystem jumped by 21%. Credit Karma's revenue jumped to $616 million, while TurboTax’s revenue rose by 12% to $581 million.

Mail Chimp, on the other hand, deteriorated by about 21%.

Intuit has also continued to repurchase its shares this year. It spent $961 million in stock buybacks as part of the $3.5 billion authorization. 

Wall Street analysts expect the company’s revenue to continue its growth in the first quarter.

The average estimate is that its revenue jumped by 10% to $8.54 billion.

A look at the estimates showed that the most optimistic analyst expects the revenue to jump to $8.7 billion. 

Analysts are also hopeful that its earnings per share will continue growing, albeit at a slower pace than expected. Its EPS is expected to come in at $12.57, higher than the $11.65 in the same period last year. 

The main catalyst for the stock will be the performance of Mailchimp, its email marketing company, whose business is struggling.

Some analysts believe that the company may do better by spinning it out.

Intuit has slowly become a highly undervalued company as its growth momentum slows.

Data shows that the company’s forward price-to-earnings moved to 16, lower than the sector median of 24. The multiple was lower than the five-year average of 35.

Intuit stock price technical analysis

INTU stock chart | Source: TradingView

The daily chart reveals that the INTU share price has moved sideways in the past few days.

It has formed a double-bottom pattern at $349 with a neckline at $482, its highest point on March 26. A double bottom is one of the most bullish signs in technical analysis.

The stock has moved slightly above the 25-day Exponential Moving Average (EMA).

It is attempting to move above the 50-day EMA, while the Relative Strength Index has moved above the neutral point at 50.

Therefore, the stock will likely rebound, potentially to the key resistance level at $482, its highest point on March 6.

The alternative scenario is where the pair retreats and moves below the support level at $349.