Why We're Not Concerned About Intuit Inc.'s (NASDAQ:INTU) Share Price
Why We're Not Concerned About Intuit Inc.'s (NASDAQ:INTU) Share Price
When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 17x, you may consider Intuit Inc. (NASDAQ:INTU) as a stock to avoid entirely with its 65.6x P/E ratio. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
With its earnings growth in positive territory compared to the declining earnings of most other companies, Intuit has been doing quite well of late. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. If not, then existing shareholders might be a little nervous about the viability of the share price.
Keen to find out how analysts think Intuit's future stacks up against the industry? In that case, our free report is a great place to start.Is There Enough Growth For Intuit?
The only time you'd be truly comfortable seeing a P/E as steep as Intuit's is when the company's growth is on track to outshine the market decidedly.
Retrospectively, the last year delivered an exceptional 43% gain to the company's bottom line. The strong recent performance means it was also able to grow EPS by 49% in total over the last three years. So we can start by confirming that the company has done a great job of growing earnings over that time.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 20% per year over the next three years. Meanwhile, the rest of the market is forecast to only expand by 10% per annum, which is noticeably less attractive.
With this information, we can see why Intuit is trading at such a high P/E compared to the market. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
What We Can Learn From Intuit's P/E?
Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
As we suspected, our examination of Intuit's analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances.
Plus, you should also learn about this 1 warning sign we've spotted with Intuit.
If you're unsure about the strength of Intuit's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
當將近一半的美國公司的市盈率(或 “市盈率”)低於17倍時,你可以考慮Intuit Inc.(納斯達克股票代碼:INTU)作爲股票,以其65.6倍的市盈率完全避免。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率如此之高。
與大多數其他公司的收益下降相比,Intuit的收益增長處於正值區間,最近表現良好。市盈率可能很高,因爲投資者認爲該公司將繼續比大多數人更好地應對更廣泛的市場阻力。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
想了解分析師如何看待Intuit的未來與行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。Intuit 有足夠的增長嗎?
只有當公司的增長有望明顯超過市場時,你才能真正放心地看到像Intuit一樣高的市盈率。
回顧過去,去年的公司利潤實現了43%的驚人增長。最近的強勁表現意味着它在過去三年中還能夠將每股收益總額增長49%。因此,我們可以首先確認該公司在這段時間內在增加收益方面做得很好。
展望未來,報道該公司的分析師的估計表明,未來三年收益將每年增長20%。同時,預計其餘市場每年僅增長10%,這明顯降低了吸引力。
有了這些信息,我們可以明白爲什麼Intuit的市盈率與市場相比如此之高。顯然,股東們並不熱衷於轉移可能着眼於更繁榮未來的東西。
我們可以從 Intuit 的市盈率中學到什麼?
僅使用市盈率來確定是否應該出售股票是不明智的,但它可以作爲公司未來前景的實用指南。
正如我們所懷疑的那樣,我們對Intuit分析師預測的審查顯示,其優異的盈利前景是其高市盈率的原因。目前,股東們對市盈率感到滿意,因爲他們非常有信心未來的收益不會受到威脅。在這種情況下,很難看到股價在不久的將來會強勁下跌。
另外,你還應該了解我們在Intuit中發現的這1個警告信號。
如果您不確定Intuit業務的實力,爲什麼不瀏覽我們的互動式股票清單,這些股票具有穩健的業務基本面,其中列出了您可能錯過的其他一些公司。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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