Mizuho Securities Reiterates Buy Rating on Intuit (INTU) on QuickBook Online Price Hike

Mizuho Securities analyst Siti Panigrahi reiterated a Buy rating and $650.00 price target on Intuit (NASDAQ: INTU) after the company officially announced plans last week to introduce 6 - 20% price hikes to its QuickBooks Online (QBO) subscription offerings and a 25% pricing increase to its per employee / per month payroll fee beginning in July.

Prices for all QBO monthly packages — Simple Start, Essentials, Plus, and Advanced — are slated to rise across the board with Simple Start growing 20%; Essentials, growing 10%; Plus, growing 6%; and Advanced growing 11%. QB Payroll Core pricing will grow 25% per employee, and the pricing model for QB Contractor Payments is now a flat fee of $15 for up to 20 contractors and $2/additional contractor vs. $4/contractor previously.

The price hikes take effect on July 1 for all Simple Start/Essential subscriptions, July 18 for all new subscriptions, August 1 for existing Plus and Advanced customers, and September 1 for existing wholesale subscriptions and ProAdvisors.

The analyst commented, "While the consumer tax business remains defensive during a recession, Intuit's scheduled price increases reinforce our willingness to own INTU shares during any potential macro slowdown. We expect the tax business, QB, and CK to be resilient, with CK’s differentiated Lightbox platform benefiting from tightening card issuance underwriting. INTU currently trades at NTM P/E of 27x and EV/NTM FCF of 26x. We base our $650 PT on a NTM P/E multiple of 47x, and EV/NTM FCF multiple of 46x, which we believe is justified by Intuit's defensive business with strong long-term fundamentals"

For an analyst ratings summary and ratings history on Intuit click here. For more ratings news on Intuit click here.

Shares of Intuit closed at $369.71 yesterday.

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