INTU

Intuit is firing on every fundamental cylinder. FY2025 revenue rose 15.6% to $18.8B, extending a clean five-year ramp from $9.63B in FY2021, while net income jumped 30.6% to $3.87B and operating income 35.6% to $4.92B — earnings are growing roughly twice as fast as the top line, evidence of real operating leverage as the July-2024 reorganization (substantially complete in Q1 FY2025, total cost $238M) reallocated spend toward growth areas. Margins are excellent and improving: 26.1% operating, 20.5% net, with a 19.6% ROE. This is a capital-light machine — $6.21B of operating cash flow against just $84M of capex — that funded $2.77B of buybacks and $1.19B of dividends while shrinking the share count. Balance sheet is sound: liabilities/equity of 0.88x, $5.97B long-term debt with zero current maturities, comfortably serviced by cash generation despite the cash balance dipping 20% to $2.88B (a use of cash for returns, not distress).

The valuation is what makes this compelling. At $267 the stock trades at 19.5x FY diluted EPS of $13.67 and 4.0x sales — undemanding multiples for a business compounding EPS at 31% with 20%+ net margins. On a growth-adjusted basis the PEG sits well below 1, meaning the market is paying a market multiple for distinctly above-market quality and growth. A great franchise at a fair-to-cheap price is the textbook buy setup; the gap between the multiple and the growth/return profile is the edge here.