Intuit Graded D Even as Wall Street Retains Buy Ratings

• Our read: EasyAlpha grades Intuit Inc D against its industry peers, with valuation standing as its main strength against growth as its primary watch item, while Intuit Inc is graded D by EasyAlpha while 60.0% of 35 analyst ratings are buys.
• The day: Shares fell 0.5% to close at $275.79 on Friday, September 25, with our sources showing no reported driver.
• Watching: Next quarterly earnings scheduled for Thursday, November 19.

Intuit Inc shares fell 0.5% on Friday, September 25 to close at $275.79, marking a four-session losing streak. The stock traded between $271.43 and $277.39 during the session before settling slightly lower (historical trading data). Our sources show no reported company-specific driver for the move.

The quiet session followed a larger downtrend. Over the past month, the shares are -20.3%, bringing the year-to-date return to -58.4%. Intuit Inc now trades 60.4% below its 52-week high of $696.14 and 9.6% above its 52-week low.

The prolonged drop has compressed Intuit Inc's valuation multiples, leaving the shares at a forward price-to-earnings ratio of 12.7. An outside analysis compared Intuit with Oracle and noted that Intuit looks attractive on forward valuation multiples. Even with that valuation, EasyAlpha grades Intuit Inc D, indicating below-average quality with more warning signs than its industry peers. In EasyAlpha's analysis, valuation is the company's top strength, while growth is the main area to watch.

That cautious rating stands apart from Wall Street. Analysts hold an average price target of $405.60, which sits 47.1% above Friday's close. However, EasyAlpha's historical quality grading shows that companies graded A or B have stronger fundamentals and historically have carried a lower risk of large drawdowns than companies graded D or E.

Intuit Inc generated quarterly revenue growth of +13.7% year over year, but the market remains cautious. The next formal test for the business arrives when it reports quarterly earnings on Thursday, November 19.