Software Stock Rises After Upbeat Results, Forecast

INTU is brushing off several price-target cuts

Deputy Editor
May 25, 2022 at 10:44 AM
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Intuit Inc (NASDAQ:INTU) is up 5% to trade at $376.79 at last check, after the financial software company reported better-than-expected fiscal third-quarter results, while raising its full-year revenue and operating income forecasts. Intuit said its business will not be affected by macro-economic headwinds and inflation, however, several analysts aren't convinced. No fewer than eight firms chimed in with price-target cuts this morning, including BofA Global Research to $530 from $650. 

Intuit stock has been struggling to stage a rally off its May 12 18-month low of $339.36. Middling below their 10-day moving average and the $375 level for the past couple weeks, INTU is down 41.8% year-to-date.

It's worth noting, considering today's bear notes, that analysts are still overwhelmingly bullish in their ratings. Of the 13 analysts in coverage, 12 carry a "strong buy," with one a tepid "hold." 

Options traders have been bullish as well. INTU's 50-day call/put volume ratio of 1.55 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 93% of readings from the past year. 

Today's options activity shows a slight shift in sentiment, with 6,760 puts and 5,847 calls across the tape so far -- nine times the intraday average volume. The weekly 3/27 390-strike call is the most popular, followed by the weekly 3/27 357.50-strike put, with new positions being opened at the latter. 

Now looks like a good time to weigh in with options. The security's Schaeffer's Volatility Scorecard (SVS) sits at a 94 out of 100, meaning INTU has exceeded option traders' volatility expectations during the past year.


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