All through fiscal 2006, and fiscal 2007 to date, analysts have failed to correctly estimate Intuit (NASDAQ:INTU) earnings. They get one last chance to avoid a second year's clean sweep before fiscal 2008 starts up. Intuit reports its Q4 numbers Wednesday afternoon.

What analysts say:

  • Buy, sell, or waffle? Fifteen analysts track Intuit, which gets twice as many buy ratings as holds.
  • Revenue. On average, the analysts expect sales to rise 21% to $415.7 million.
  • Earnings. Intuit's per-share loss is predicted to expand to $0.05.

What management says:
When last we heard from Intuit, CEO Steve Bennett was talking up his firm's "great results," and in particular, the performance at Tax and Small Business, which he called Intuit's "two biggest growth engines." Kind words were also said about "our newest growth engine, Financial Institutions" -- featuring recent purchase Digital Insight. Based on the Q3 numbers (and holding Q4 guidance steady), Bennett decided to up guidance for fiscal 2007 to the following: $2.68 billion to $2.7 billion in revenue (about 15% growth) and $1.15 to $1.17 per share in profit (likewise.)

In other news, Intuit added a pair of high-profile new directors to its board in June. Suzanne Johnson is a former vice chairman of Goldman Sachs (NYSE:GS). Edward Kangas has a day job chairing the board at Tenet Healthcare (NYSE:THC).

What management does:
Intuit halted and reversed the slight subsidence in its margins last quarter, as well. Gross, operating, and net margins that had all been trending downwards jerked up sharply on the strong quarterly results. How does that compare to its competitors? It's hard to say, what with Intuit, and its rivals, all working in a mix-and-match assortment of business lines. For what it's worth, though, Intuit's operating margins lag those of Microsoft (NASDAQ:MSFT) and Jackson Hewitt (NYSE:JTX) (which offer small-business accounting software and in-person tax advice, respectively), while beating out ADP (NYSE:ADP) and H&R Block (NYSE:HRB).





























All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

One Fool says:
After providing our members with a tidy 92% gain, Intuit got the boot from the Motley Fool Inside Value portfolio almost one year ago -- but the reluctance with which portfolio advisor Philip Durell let it go was almost palpable. Calling Intuit an "extraordinary franchise" with "very high investment returns," Philip did, however, considered the shares overvalued when they topped $34 per share.

As it turned out, the market soon reached the same conclusion, and those same shares now sell for about 18% less than when Philip cut bait. Personally, I think it's possible that Intuit might return the portfolio in the future. Trading for just 16 times trailing free cash flow today, and with analysts predicting 15% annual profit growth over the next five years, the shares are starting to look quite reasonably priced to this Fool. Let's see whether Wednesday's numbers change the picture any.

Does a 92% profit in less than 18 months sound good to you? Well, you may be surprised to learn that as well as it did for us, Intuit is only the third most profitable pick in the Inside Value portfolio. Who's done even better for our subscribers -- and who else may put all three of these stocks to shame in the future? Take a free trial to the service and find out.

A thorough audit of further Foolishness:

Fool contributor Rich Smith owns shares of Jackson Hewitt. Jackson Hewitt is a Hidden Gems Pay Dirt recommendation, and Microsoft is an Inside Value pick. You don't have to intuit The Motley Fool's disclosure policy. You can read it right here.