When Intuit Inc (NASDAQ:INTU) released its most recent earnings update (31 October 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Intuit’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not INTU actually performed well. Below is a quick commentary on how I see INTU has performed. Check out our latest analysis for Intuit

Commentary On INTU’s Past Performance

I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to analyze many different companies on a similar basis, using the latest information. For Intuit, its most recent earnings (trailing twelve month) is US$984.00M, which compared to the prior year’s level, has jumped up by 21.93%. Given that these values may be relatively short-term, I have calculated an annualized five-year figure for INTU’s net income, which stands at US$745.85M This means on average, Intuit has been able to consistently grow its bottom line over the last few years as well.

How has it been able to do this? Let’s take a look at whether it is merely attributable to industry tailwinds, or if Intuit has experienced some company-specific growth. The climb in earnings seems to be propelled by a strong top-line increase outpacing its growth rate of expenses. Though this has caused a margin contraction, it has made Intuit more profitable. Viewing growth from a sector-level, the US software industry has been growing its average earnings by double-digit 11.22% over the past year, and 10.52% over the last five years. This means any uplift the industry is deriving benefit from, Intuit is able to leverage this to its advantage.

What does this mean?

Though Intuit’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Intuit gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Intuit to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for INTU’s future growth? Take a look at our free research report of analyst consensus for INTU’s outlook.

• 2. Financial Health: Is INTU’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

• 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 October 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.