Intuit's TurboTax Live Could Transform Tax Prep, Says Bullish Guggenheim

Millions of Americans are putting the finishing touches on their taxes this week. A Guggenheim analyst said Thursday that within the next few years, many of them may be using TurboTax Live, which could dramatically boost shares of Intuit Inc. (NASDAQ: INTU).

The Analyst

Guggenheim’s Ken Wong maintained a Buy rating on Intuit and boosted the price target from $260 to $310.

The Thesis

Guggenheim sees TurboTax Live as “transformational technology” that will speed up a shift from using tax preparers to self-preparation with online assistance, Wong said in a Thursday note.

The most optimistic scenario projects TurboTax being a $5-billion business by 2022 and bringing in $7 billion by 2025, the analyst said in Guggenheim’s new series highlighting “transformational ideas.”

“We view TurboTax Live as a disruptive technology and change catalyst that could lift the growth potential of the consumer business from the 9-11-percent target provided at analyst day into the mid-teens,” Wong said. “Our test drive of Live and interaction with TurboTax reps suggest demand is strong, with their expectations for a 50-percent capacity hike next year.”

In addition to boosting its 12-month target price by $50, Guggenheim is also trying to put a value on the long-term potential for changing the way people do their taxes by modeling for a “three-year franchise potential” that pegs Intuit at $380 to $400 a share, the analyst said.

Price Action

Intuit shares were up 0.22 percent at $259.65 at the time of publication Thursday.

Related Links:

The IRS Is Open And Taxpayers Are Filing: What It Means For Intuit

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