Intuit (INTU) is poised for "positive revisions near term" for earnings after fiscal Q2 results topped estimates by analysts, Morgan Stanley said Wednesday in a report.
Strength in the small business segment and Credit Karma drove revenue above estimates in Q2, and management maintained "conservative" full-year targets for sales and earnings, Morgan Stanley said.
Notable margin expansion was driven by investments in generative artificial intelligence that generated $90 million in annualized efficiencies within the customer success organization and enabled up to 40% faster coding, the report said.
QuickBooks Online offerings and Credit Karma performance signaled operational momentum, and revenue from upmarket solutions such as QBO Advanced and the Intuit Enterprise Suite jumped 40%, supported by improvement in sales productivity, the report said.
Morgan Stanley upgraded its rating on Intuit stock to overweight from equal-weight on "increased conviction in the potential for positive EPS revisions." The price target held at $730.
Intuit shares jumped 13% in recent Wednesday trading.
Price: 627.44, Change: +71.81, Percent Change: +12.92
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.