INTUIT INC (NASDAQ:INTU): A Strong Growth Stock with Bullish Technical Breakout Potential

The strategy of finding strong growth stocks with positive technical breakout patterns blends fundamental strength with momentum signals, providing a balanced method for investors looking for companies with solid business performance and rising price potential. This approach selects stocks showing faster earnings and revenue growth (fundamental factors) while also displaying bullish chart patterns or breakouts (technical factors). By concentrating on firms with good profitability and financial stability, the strategy seeks to lower risk while taking advantage of upward price momentum.

INTUIT INC (NASDAQ:INTU) stands out as a strong candidate under this model, showing solid growth fundamentals along with a promising technical setup.

Fundamental Strength: Growth, Profitability, and Financial Health

INTU’s fundamental profile matches the requirements for a high-quality growth stock:

• Growth (Rating: 7/10)

  • Revenue increased by 14.99% YoY, with a 5-year annual growth rate of 19.14%.
  • Earnings per share (EPS) rose by 17.02% YoY, supported by a 20.25% CAGR over the past five years.
  • Forward EPS and revenue are expected to grow at 14.94% and 13.61%, respectively, showing continued momentum.

• Profitability (Rating: 8/10)

  • Strong margins: 19.07% net profit margin (better than 86.88% of software industry peers) and 25.68% operating margin (top 9% of the sector).
  • High return metrics: 17.23% ROE (above 85% of peers) and 14.15% ROIC (top 8% of the industry).

• Financial Health (Rating: 7/10)

  • Solid solvency: Debt-to-equity ratio of 0.29 and Altman-Z score of 9.75 (low bankruptcy risk).
  • Moderate leverage: Debt-to-FCF ratio of 1.05 indicates sufficient capacity to meet obligations.

These metrics highlight INTU’s ability to reinvest in growth while keeping financial stability, a key feature for long-term success.

Technical Breakout: Bullish Momentum and Support Levels

INTU’s technical setup (full report here) supports its fundamental strength:

• Trend Strength: Both short- and long-term trends are upward, with the stock trading close to its 52-week high ($790.60).
• Support Zones: Multiple support levels exist between $745.94, $770.10, backed by moving averages and trendlines.
• Resistance Breakout: A clear move above $787.64 could indicate further gains, with the stock currently testing this level.
• Volume and Liquidity: Average daily volume of 1.69M shares ensures good market activity.

The mix of a narrow trading range near highs and strong underlying trends suggests accumulation, often a sign of upcoming breakout moves.

Why These Criteria Matter

As noted in growth investing principles, sustainable growth stocks must combine strong fundamentals with market confirmation (price action). INTU demonstrates this:

• Its high margins and ROIC support its premium valuation (P/E of 40.14, below 65% of software peers).
• The technical breakout aligns with institutional interest, reducing the chance of misleading growth stories.

For investors searching for similar opportunities, this predefined screen filters for stocks with strong growth, profitability, and technical setups.

Disclaimer: This analysis is not investment advice. Conduct your own research or consult a financial advisor before making decisions.