Written By 
Reviewed By Lora Khozs
Ever since Nvidia (Nasdaq: NVDA) announced its 10:1 stock split, the Nasdaq has been on a tear, most recently attaining record status above the 17,000 level. This development has not gone unnoticed, with industry leaders across various sectors paying close attention and considering their next strategic moves. Among these is Intuit (Nasdaq: INTU), a prominent provider of financial solutions, known for products like QuickBooks, aimed at individuals and small businesses. As Intuit’s stock ventures into pricey territory, there are several compelling reasons why the company might consider a stock split similar to Nvidia’s.
Intuit Shares Elevated Over the Past 12 Months
Stock Performance and Volatility
Over the past 12 months, Intuit stock has experienced significant volatility, trading within a range of $400 to $675. Despite this, investors who held onto their shares rewarded with both share appreciation and a $0.90 per share cash dividend distribution. Analysts remain bullish on Intuit, with over a dozen “buy” ratings and no “sells,” reflecting strong confidence in the stock’s potential.
Analyst Expectations
The average price target for Intuit stock is $720, suggesting a potential increase of 20% from current levels. Intuit’s most recent quarterly performance exceeded consensus estimates, prompting the company to raise its guidance for Q3, including expectations for 13% revenue growth. Additionally, Jefferies analysts have raised their price target on INTU stock to $770, indicating substantial upside potential.
Future Prospects
Given these optimistic expectations, the topic of a stock split has likely been discussed in Intuit’s board meetings. A stock split could make the shares more accessible to a broader range of investors, potentially driving further demand and price appreciation.
Intuit Is a Portfolio Favorite
Institutional and Hedge Fund Interest
Intuit has established itself as a bellwether stock since its inception in the early 1980s and subsequent public offering. The stock is a favorite among leading institutional investors, including Vanguard, BlackRock, and JPMorgan. It is frequently traded by hedge funds such as Battery Global Advisors, Center Lake Capital Management, and Thorntree Capital.
Comparison with Other Fintech Stocks
Individual investors often compare Intuit’s performance to other fintech stocks like PayPal Holdings (Nasdaq: PYPL), which has seen flat performance over the last 12 months and does not pay a dividend. A potential stock split could make Intuit’s shares more affordable for individual investors, facilitating broader market participation.
Stock Split History
Previous Splits
Since becoming publicly traded in 1993, Intuit has completed three stock splits: a two-for-one split in August 1995, a three-for-one split in September 1999, and another two-for-one split in June 2006. Despite these historical splits, Intuit’s stock price didn’t reach the $500 level until last summer, suggesting a revisit of this strategy might be timely.
Strategic Implications
Revisiting the stock split strategy could pave the way for more investors to buy into Intuit, thus enhancing liquidity and potentially boosting the stock price. A 2:1 stock split would bring the shares down to approximately $300 each, making them more accessible to mainstream investors without changing the overall market value of the company.
Conclusion
With Intuit’s stock currently hovering around $600 and the broader market trends influenced Nvidia’s recent stock split. And Intuit is positioned to consider similar move. The combination of strong analyst expectations, robust institutional interest, and historical precedent makes a compelling case for Intuit to implement a stock split. Such a decision could democratize access to its shares, potentially driving further investment and continued growth for the company. As the market watches closely, Intuit’s next strategic move will be one to follow closely.
