Intuit joins hands with OnDeck
As discussed in the previous part of the series, payment service providers such as Intuit (INTU), Paypal(PYPL) and Square are now venturing into the lending space. Early this month, Intuit announced its plans to create a $100 million fund by joining hands with OnDeck, an online lender in the United States. The objective is to offer loans to the users of its QuickBooks accounting software.
The new fund will extract data from the user’s average cash balances and receivables in order to shortlist the worthy lenders with a good credit history. These lenders will be the ones who require immediate finances in the next three to six months. They will then be supplied with loans generated and serviced by OnDeck.
Intuit’s performance in fiscal 4Q15 and future outlook
Intuit reported revenue of $696 million in fiscal 4Q15—a 7% rise from revenue of $649 million in 4Q14. The company posted an earnings per share (EPS) of $0.05, which was -$0.10 in 4Q14. Its competitors, H&R Block (HRB) and ADP (ADP) posted revenue of $2.3 billion and $2.67 billion in their last quarter, respectively.
For fiscal 2016, Intuit has given the following outlook:
- revenue of $4.525–$4.600 billion with 8%–10% growth
- GAAP (generally accepted accounting principles) operating income of $1.115–$1.145 billion with 51%–55% growth
- GAAP diluted EPS of $2.50–$2.55 compared to $1.28 in fiscal 2015, including goodwill and intangible asset impairment charges
You can get diversified exposure to Intuit by investing in the First Trust ISE Cloud Computing Index ETF (SKYY). It holds 0.79% of the stock.