Intuit Stock Joins Sell-Off After Credit Karma Buzz

Intuit is nearing a $7 billion deal to buy Credit Karma

by Patrick Martin

Published on Feb 24, 2020 at 10:07 AM

When we last checked in with Intuit Inc. (NASDAQ:INTU), the software concern was gearing up for a historically bullish first quarter. Today, Intuit is in the headlines after the Wall Street Journal reported over the weekend that the TurboTax maker was nearing a $7 billion agreement to buy personal finance program Credit Karma. The deal could become official as soon as later today.

In response, Intuit stock is down 4.8% to trade at $283.84, on track for its third-straight loss and worst single-session drop since November 2018. Last Wednesday, INTU snagged a record high of $306.89, and is still up roughly 14% in the last 12 months. Plus, today's pullback appears to have found support at the shares' 50-day moving average.

Analysts remain skeptical. There are 15 brokerages in coverage of INTU, and nine rate it a "hold" or "strong sell," while the consensus 12-month price target of $289.95 is now right on course with its current perch. 

Recent options activity suggests traders are betting bullishly. The equity's 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 2.54, showing long calls have easily outpaced long puts. This ratio ranks in the 94th percentile of its annual range, indicating this rate of call buying relative to put buying is unusual.


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