Well, I suppose now you expect me to gloat. To crow: "I told you so." To exult that I correctly predicted on Monday that Intuit's (NASDAQ:INTU) earnings would be great. No thanks.

After all, it's not as if I had any great insight into the numbers. Intuit itself told us that the quarter would be wonderful. It was plain as day to anyone who could read between the lines. On April 17, management reported that sales of TurboTax "Web units" had soared 37%. And we already knew that the margins on such e-sales were terrific. So it stood to reason that yesterday's results would look superb.

How superb?
This superb: Sales grew 15% in comparison with the third quarter of 2007, while profits leapt 28% to $1.33 per share. As I predicted, profit margins continued to expand, with Intuit tacking 60 basis points onto the 50.8% operating margin it boasted in the year-ago quarter. This improvement narrows the margins lead held by Jackson Hewitt (NYSE:JTX) and Paychex (NASDAQ:PAYX) -- which compete with Intuit for tax and small-business revenues, respectively -- and it expands Intuit's lead over H&R Block (NYSE:HRB) and ADP (NYSE:ADP).

Based on these numbers, CEO Brad Smith promised shareholders "another year of double-digit revenue and earnings growth for Intuit." With less than three months remaining in the fiscal year, that seems a pretty safe bet. Also a safe bet: Smith's guidance of $3.05 billion to $3.06 billion in revenue, and about $1.43 per share in profits.

Now let's assume that Intuit gets where it says it's going. How does the price look? Assuming Intuit holds on to the bump in stock price it received last night after earnings were released, we're now looking at a stock priced at $28.55 and expected to earn $1.43 per share. So the market is pinning a tail on a donkey with a price-to-earnings ratio of 20.

With analysts predicting that Intuit will grow at just 15% per year in the long term, that may look a bit pricey, but consider: Over the past nine months, Intuit has generated $652 million in free cash flow -- about 21% more cash profits than it reports in net income under GAAP. What this tells me is that although Intuit is still no bargain, it's not nearly as overpriced as it looks at first glance.

With Intuit's business only getting stronger, I'd suggest you keep a sharp eye out for unjustified price drops. My intuition tells me that anything much cheaper than 10% south of where Intuit trades today -- say $25 or so -- would be a great chance to buy.

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