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Investing.com -- Shares of Intuit Inc (NASDAQ:INTU) climbed 3.3% as the company announced its agreement to acquire GoCo, a provider of HR and benefits solutions aimed at bolstering its Human Capital Management offerings. The move is seen as a strategic effort to expand Intuit’s services to mid-market businesses through its Intuit Enterprise Suite and QuickBooks Payroll.
The acquisition is set to enhance Intuit’s current platform by integrating GoCo’s capabilities, which include hiring, onboarding, workforce management, and benefits administration. This expansion is expected to offer a comprehensive solution for businesses to manage their financials and employee lifecycle in one system.
Olivier Bartholot, Intuit’s Vice President and Segment Leader of Workforce Solutions, emphasized the importance of a unified platform for businesses to manage their teams and optimize productivity. The integration of GoCo’s features into Intuit’s offerings aligns with the company’s vision to provide a single, scalable solution for growing businesses.
GoCo’s AI tools are also expected to complement Intuit’s existing data and AI capabilities, aiming to provide personalized insights for HR teams. Intuit’s QuickBooks Payroll, which services 18 million workers annually in the U.S., will be one of the platforms to benefit from this integration.
Nir Leibovich, Co-Founder & CEO of GoCo, expressed enthusiasm over joining Intuit and contributing to its vision of a comprehensive team-management platform. The financial details of the deal, expected to close in the fourth quarter of FY25, were not disclosed.
In related news, HSBC’s Stephen Bersey upgraded Intuit’s stock rating from Hold to Buy with a price target of $699.00 prior to the acquisition announcement. Bersey highlighted Intuit’s potential for growth in the mid-market subsegment, which remains largely untapped by the company. "Currently, the vast majority of Intuit’s revenue comes from the small business sub-segment, according to our estimates. This suggests, the mid-market subsegment is largely unpenetrated and offers Intuit a long runway for growth," said Bersey.
Investors appear to be responding favorably to the acquisition news and the positive outlook from analysts, reflecting confidence in Intuit’s growth trajectory and its ability to penetrate the mid-market segment.
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