Intuit currently trades at $610.55 per share and has shown little upside over the past six months, posting a small loss of 4.3%.
Is now the time to buy INTU? Find out in our full research report, it’s free.
Why Does Intuit Spark Debate?
Created in 1983 when founder Scott Cook watched his wife struggle to reconcile the family's checkbook, Intuit provides tax and accounting software for small and medium-sized businesses.
Two Positive Attributes:
1. Billings Growth Boosts Cash On Hand
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Intuit’s billings punched in at $4.10 billion in Q4, and over the last four quarters, its year-on-year growth averaged 15%. This performance was solid, indicating robust customer demand. The cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth. 
2. Customer Acquisition Costs Are Recovered in Record Time
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
Intuit is extremely efficient at acquiring new customers, and its CAC payback period checked in at 12.2 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation due to its scale. These dynamics give Intuit more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.
One Reason to be Careful:
Long-Term Revenue Growth Disappoints
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, Intuit grew its sales at a 14.6% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds. Luckily, there are other things to like about Intuit. 
Final Judgment
Intuit’s merits more than compensate for its flaws, but at $610.55 per share (or 8.8× forward price-to-sales), is now the right time to buy the stock? See for yourself in our full research report, it’s free.
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