Sunday, February 24, 2008
I finally got around to filing my taxes today! TurboTax makes it so easy to file a simple W-2 return, although it has it's limits. Intuit (INTU), the producer of QuickBooks, TurboTax, and Quicken, crashed on Friday (dropping over 9%) after releasing poor second quarter earnings after the bell on Thursday. TurboTax sales came in strong, but increased costs caused the bottom line to hurt. Increased competition from Microsoft's (MSFT) Office Accounting and Sage's Peachtree concerned Intuits management enough to cut earnings guidance for the remainder of the year.
Is this a buying opportunity or is this a turning point for a software giant? When Washington procrastinates on passing legislation to extend tax relief, the window to adjust, produce, package and ship the tax software shrinks. This process takes months of preparation so when a change comes in at the last minute the costs are going to be substantial.
Intuit has great products that are extremely user friendly. They are not for everyone, but for the average W-2 employee they do the job. I will keep my eye on this stock and if it drops down into the low twenties I may pick up a few shares.
Disclosure: No position