When investors come across the name Intuit (NASDAQ:INTU), the first thought to likely materialize is taxes. While the enterprise certainly specializes in tax-preparation software, it’s also garnering considerable attention for its artificial intelligence (AI) protocols. Moving forward, the company could be an ideal AI stock to play the gig economy. I am bullish on INTU stock.
According to data from Statista, the gig economy may potentially reach a valuation of $455.2 billion by the end of this year. In addition, other sources, such as Business Research Insights, expect the collective commercial activity of freelancers to hit $873 billion in 2028. It’s a massive market, one that will need increasing tax-preparation help. Fundamentally, then, this framework bolsters the long-term narrative of INTU stock.
Just as importantly, the initial work-from-home pivot that enterprises launched to mitigate the COVID-19 impact shifted workplace paradigms. Now, white-collar workers realize that it’s possible – though the effectiveness angle is debatable – to operate remotely. Not surprisingly, when major enterprises put an end to this privilege, many worker bees revolted.
However, under a slowing environment for many industries combined with mass layoffs, employers no longer want to play ball. Therefore, those that insist on working from home will probably be forced to branch out on their own.
To be fair, a majority of folks will likely tow the corporate line. Still, a good sum will take the gig economy plunge, boding well for INTU stock. However, this dynamic may only be a secondary catalyst for the tax-prep giant.
INTU Stock Analysis
Supporting the bull case, on TipRanks, INTU stock has a ‘Perfect 10’ Smart Score rating. This indicates strong potential for the stock to outperform the broader market.
INTU Stock Should Benefit as an AI Investment
Though the usual suspects in the big tech sphere receive the lion’s share of attention regarding AI protocols, astute investors ought to carefully consider INTU stock. Again, it’s not the most exciting enterprise. However, its AI and machine learning architecture could forever change the game.
That’s no hyperbole. Last year, Intuit mentioned on its website that it’s leveraging AI to enhance the user experience (UX). Given that filing taxes can be a daunting task – particularly for small-business owners (i.e., gig workers) – enhancing UX carries considerably more importance than the average layperson might realize.
Moreover, Intuit dove deeply into conversational AI technologies and intelligent AI assistant programs. Here, INTU stock can really drive forward as a disruptive investment. Through its conversational AI interface, users can ask questions – in natural language – about various tax-related concerns. Further, the system can respond with clear guidance and solutions.
As Intuit’s tech evolves, it may change America’s relationship with tax preparation. For instance, an article published by the New York University School of Law revealed what most folks know automatically: the U.S. tax code features numerous complexities, and as a result, most filers make mistakes.
Therefore, if Intuit helps cut down on these sometimes-costly errors, this attribute alone may be worth buying INTU stock.
As for the gig economy, gig workers (or, more properly, independent contractors) file 1099 forms, which among other things, require profit and loss statements. More complex than an employee’s W-2 form, the gig economy will organically facilitate greater relevancies for Intuit’s AI protocol. Over time, this framework should also bolster INTU stock.
Compelling Financials Await
Another factor favoring INTU stock centers on its financials. For full disclosure, INTU trades at a trailing multiple of 60.5, which is overvalued for the industry. However, Intuit is built for the long run. With patience, investors can enjoy a possibly compelling opportunity.
For one thing, Intuit’s Altman Z-Score (a solvency ratio) hits 7.79, indicating very low bankruptcy risk. Operationally, the company enjoys a three-year revenue growth rate of 20.4%. This stat outpaces 76% of the competition. As well, its three-year book growth rate pings at 59.4%, above 89.7% of the industry.
On the bottom line, the tax-prep specialist commands a net margin of 14.2%, ranking better than 85.2% of sector peers. Finally, its return on equity is 12.4%, beating 71.4% of competitors. Further, the relatively robust stat reflects a high-quality business.
Is INTU Stock a Buy, According to Analysts?
Turning to Wall Street, INTU stock has a Strong Buy consensus rating based on 12 Buys, one Hold, and one Sell rating. The average INTU stock price target is $480.36, implying 17.6% upside potential.
The Takeaway: INTU Stock is an AI Sleeper
In many ways, Intuit comes off as an inoffensive enterprise, with few talking about it with passion and vigor. Of course, the harsh reality is that tax preparation ranks on the excitement scale as watching paint dry. However, with the integration of AI protocols, the company can potentially change a soul-sucking process into a quick, efficient one. If so, INTU stock deserves to be on your radar.
