By Angela Palumbo

The deadline to file taxes has come and gone, but that doesn't mean it's too late to buy Intuit stock, says a Scotiabank analyst.

Allan Verkhovski upgraded shares of Intuit to Outperform from Perform and raised his price target to $700 from $600, which implies a 19% increase from the stock's closing price of $588.08 on Wednesday.

Intuit is a fintech company and the parent of TurboTax, a website that allows users to file their taxes. Tax season started on Jan. 27 and ended on April 15. This is a massively important time for Intuit, as most of its revenue each year comes from those tax filers. In 2024, April quarter revenue of $6.7 billion far exceeded January quarter revenue of $3.2 billion.

Personal accountants, companies like H&R block, and the IRS offer competing tax filing services to TurboTax. However, the IRS Direct File Program, which was developed under Joe Biden's administration, is at risk of being shut down. The Associated Press reported on Wednesday that Donald Trump's administration plans to eliminate the IRS' Direct File program, which gives eligible users the ability to file taxes for free. This comes as the Department of Government Efficiency, or DOGE, looks to cut federal spending.

An administration official told Barron's that no decisions on the future of DirectFile have been made yet.

"While the IRS Direct File program shutting down looks increasingly likely, INTU has been heads down on disrupting the $35 billion assisted tax market through local search, timely marketing, and AI-powered Full Service delivering a superior customer experience," Verkhovski wrote in a research note.

Verkhovski likes Intuit's work with generative artificial intelligence. People who file with TurboTax have the option to use the company's AI assistant, Intuit Assist, which aims to make the process easier and quicker.

"INTU highlighted it can automatically turn emails, electronic documents, and handwritten notes into estimates, invoices, or bills, while doing the accounting in the background," Verkhovski said. "We believe this level of productivity gains for customers will justify continued price increases."

Shares of Intuit were up 0.7% on Thursday to $591.92. The stock has fallen 5.8% this year, compared with the 9.6% decline of the S&P 500.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 17, 2025 13:02 ET (17:02 GMT)

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