What happened

Intuit (NASDAQ:INTU) outperformed a booming market in the first half of 2021, with shares rising 29% -- about double the 14.4% increase in the S&P 500 -- according to data provided by S&P Global Market Intelligence.

That rally built on earlier market-thumping performance in 2020 for the tax preparation software giant.

A woman enters financial data into her smartphone.

Image source: Getty Images.

So what

The booming U.S. economy is the main factor in the 2021 rally because rising incomes for consumers and businesses tend to spark demand for Intuit's tax, accounting, and payments services. The shift in work toward cloud services like QuickBooks has helped create an ideal selling environment for the company.

Sales in the nine months that ended in late April were up 21%, Intuit announced in late May, including a 39% spike in the most recent quarter. Intuit has seen a sharp uptick across its portfolio of consumer, small business, and self-employment software products. Operating income has also surged thanks to improving profit margins.

Now what

Because of delayed filing deadlines this year, investors won't have a clear picture of Intuit's tax season results until the company announces fiscal fourth-quarter earnings in mid-August. But growth is expected to remain strong, with CEO Sasan Goodarzi and his team projecting a 26% to 28% sales spike in the fourth quarter, and 22% growth for the full fiscal year. Those figures mark a significant upgrade from the prior outlook Intuit had issued.

The stock's rally depends on Intuit continuing to raise the bar on growth, which would become harder if the U.S. economic expansion slows. In the meantime, the company today boasts a huge base of engaged users that should help it market its widening portfolio of services. That asset, plus Intuit's growing cash holdings, give the stock a good chance to extend its rally through the rest of 2021.

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