Please ensure Javascript is enabled for purposes of website accessibility

Why Intuit Stock Jumped 25% in 2018

By Daniel Sparks – Updated Apr 15, 2019 at 10:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The financial software company's stock crushed the market last year.

What happened

Shares of financial software company Intuit (INTU -0.68%) rose 24.8% in 2018, according to data provided by S&P Global Market Intelligence. The gain was particularly impressive given that it marks a significant outperformance for the stock relative to the overall market. Highlighting the market's woes in 2018, the S&P 500 declined about 6% during the year.

Intuit stock's outperformance was driven by strong business performance, including accelerating revenue growth and a huge increase in QuickBooks Online subscribers.

QuickBooks Online on a tablet.

Image source: Intuit.

So what

In Intuit's fiscal 2018, which ended on July 31 of last year, revenue jumped 15% year over year. This was a significant acceleration compared with Intuit's 10% year-over-year revenue growth in fiscal 2017. In addition, Intuit's year-over-year revenue growth in its first quarter of fiscal 2019 continued to outpace fiscal 2017 revenue growth, rising 12% year over year. 

Intuit's profitability is improving even more rapidly. GAAP and non-GAAP earnings per share increased by 25% and 27%, respectively, in fiscal 2018. For the first quarter of fiscal 2019, GAAP EPS was $0.13, up from a loss of $0.01 in the year-ago quarter. Non-GAAP EPS for this period jumped 71% year over year to $0.29.

Also, Intuit's QuickBooks Online subscriptions have notably soared, rising 41% year over year to 3.6 million subscribers in the company's fiscal first quarter of 2019.

Now what

In Intuit's fiscal first-quarter earnings release, published Nov. 19, 2018, management was optimistic about the coming quarters. "We are off to a strong start this year, with overall revenue growth of 12 percent during the first quarter, with strength across each of our businesses," said then-Intuit CEO Brad Smith.

Check out the latest Intuit earnings call transcript.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Intuit. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.