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I looked into one of the more popular Fintech ETF's recently $FINX and searched through the total holdings. I came across $INTU & decided to do some personal analysis since I was familiar with the name and came across some positive LT signs: See Thread
$INTU has provided some very strong and Consistent growth over the last 3 years for both Top and bottom line; NI grew 17% in 2019 and 18% in 2020. Revenue has grown 13% the last two years consistently.
Both Basic EPS & Profit Margin have also seen increases, with EPS up to $6.99 in 2020 from $5.99 in 2019. PM has grown roughly 1% each year since 2018. Really just looking for consistency at this stage in the game, as Intuit is already a large established company.
On the BS, $INTU used more debt as a source of financing in ‘20 ($2.8 B+), increasing its D/E ratio to 2.26 from 1.66. The encouraging sign is that they already reduced these liabilities by nearly $900M in Q1 of the 2021 FY, showing a strong ability to grow without reducing EPS.
Finally from a Macro perspective, FinTech is very enticing. Managing finances will always be a part of society, but technology is the future. I’ve seen TurboTax for years, but other services “Quickbooks” & “Mint” can see growth in popularity come 2021.
I have friends that have used Quickbooks working in Accounting and have heard nothing but positive things, & I personally have downloaded Mint this year and love the layout and purpose of it to help manage my financial accounts.
I don't expect drastic growth with $INTU compared to the rest of the sector, but I feel this is a name I can get behind and feel comfortable about steady growth over time (Bronco). Its current P/E (51) is also below industry average of (60) so that gives a similar idea.
The P/E could indicate less anticipated growth, OR it could signal a little bit of value even up here at $380! Either way, I thought this was an interesting company to investigate, and I’ll be following in 2021.
