INTU Trade Idea Post Earnings
Trade Plan
1. Bullish Trade Scenario
Setup:
Main Level to Watch: A break and close above $263.66. This level is key for continuation and could signal further upside.
Entry Point: Enter on a pullback to the closing price of the earnings day, around $259.96.
Stop Loss: Set below the low of the day (LOD) at $254.52. This places your stop just below a significant intraday support level, minimizing risk.
Profit Targets:
First Target: $275 (a potential area of resistance or psychological level)
Second Target: $295 (a higher target, assuming strong continuation)
Risk-to-Reward (R/R):
Risking about $6 per share for a potential first target at $275 gives you approximately 2.36R. If the price reaches $295, the R/R increases even further.
Considerations for the Bullish Trade:
2. Bearish Trade Scenario
Setup:
Main Level to Watch: A break below the LOD at $254.52. This could signal weakness or a potential fill of the earnings gap.
Entry Point: Enter a short position on a break of the LOD at $254.52.
Stop Loss: Set above the closing price of the earnings day at $260.79. This gives some room above the recent support turned resistance if the stock reverses.
Risk-to-Reward (R/R):
Risking about $6.27 per share with the potential for a gap fill or further downside.
Considerations for the Bearish Trade:
Earnings Recap:
Key Financial Highlights
Total Net Sales:
Current Quarter: $2.085 billion
Year-Ago Quarter: $1.787 billion
YoY Growth: 16.7%
Subscription Services Revenue:
Current Quarter: $1.9 billion
Year-Ago Quarter: $1.62 billion
YoY Growth: 17.3%
12-Month Revenue Backlog: $6.8 billion, up 16.1% YoY
Total Revenue Backlog: $21.58 billion, up 20.9% YoY
Professional Services Revenue:
Current Quarter: $182 million
Year-Ago Quarter: $163 million
YoY Growth: 11.7%
Profitability and Efficiency
Operating Income:
Current Quarter: $111 million
Year-Ago Quarter: $36 million
YoY Growth: 208.3%
Non-GAAP Operating Income:
Current Quarter: $518 million
Year-Ago Quarter: $421 million
YoY Growth: 23%
Non-GAAP Operating Margin: Improved from 23.6% to 24.9%
Cash Flow and Liquidity
Operating Cash Flow:
Current Quarter: $571 million
Year-Ago Quarter: $425 million
YoY Growth: 34.4%
Share Repurchases:
1.4 million shares repurchased for $309 million
Cash Position:
Cash and Equivalents: $7.37 billion
Long-Term Debt: $2.98 billion
1. Bullish Trade Scenario
Setup:
Main Level to Watch: A break and close above $263.66. This level is key for continuation and could signal further upside.
Entry Point: Enter on a pullback to the closing price of the earnings day, around $259.96.
Stop Loss: Set below the low of the day (LOD) at $254.52. This places your stop just below a significant intraday support level, minimizing risk.
Profit Targets:
First Target: $275 (a potential area of resistance or psychological level)
Second Target: $295 (a higher target, assuming strong continuation)
Risk-to-Reward (R/R):
Risking about $6 per share for a potential first target at $275 gives you approximately 2.36R. If the price reaches $295, the R/R increases even further.
Considerations for the Bullish Trade:
- Positive Earnings Report: The earnings were bullish, suggesting potential for further upside.
- Strong Buyers Support: The steady buying throughout the day and the close above VWAP indicate strong buyer interest.
- Gapped Up with Volume: The gap-up and subsequent market cap increase demonstrate a strong market reaction to earnings, but also indicate some profit-taking potential after such a big move.
2. Bearish Trade Scenario
Setup:
Main Level to Watch: A break below the LOD at $254.52. This could signal weakness or a potential fill of the earnings gap.
Entry Point: Enter a short position on a break of the LOD at $254.52.
Stop Loss: Set above the closing price of the earnings day at $260.79. This gives some room above the recent support turned resistance if the stock reverses.
Risk-to-Reward (R/R):
Risking about $6.27 per share with the potential for a gap fill or further downside.
Considerations for the Bearish Trade:
- Overextension Risk: The stock gapped significantly from $232 to $262, adding over $10 billion in market cap overnight. This might indicate overextension and potential for a pullback.
- Potential Profit-Taking: After a substantial gap up, there's often some profit-taking which could lead to a correction or retracement to lower levels.
- Unpredictability of Stock Reactions: Despite bullish earnings, stocks can be unpredictable, and any market sentiment or macroeconomic factors could cause a sell-off.
Earnings Recap:
Key Financial Highlights
Total Net Sales:
Current Quarter: $2.085 billion
Year-Ago Quarter: $1.787 billion
YoY Growth: 16.7%
Subscription Services Revenue:
Current Quarter: $1.9 billion
Year-Ago Quarter: $1.62 billion
YoY Growth: 17.3%
12-Month Revenue Backlog: $6.8 billion, up 16.1% YoY
Total Revenue Backlog: $21.58 billion, up 20.9% YoY
Professional Services Revenue:
Current Quarter: $182 million
Year-Ago Quarter: $163 million
YoY Growth: 11.7%
Profitability and Efficiency
Operating Income:
Current Quarter: $111 million
Year-Ago Quarter: $36 million
YoY Growth: 208.3%
Non-GAAP Operating Income:
Current Quarter: $518 million
Year-Ago Quarter: $421 million
YoY Growth: 23%
Non-GAAP Operating Margin: Improved from 23.6% to 24.9%
Cash Flow and Liquidity
Operating Cash Flow:
Current Quarter: $571 million
Year-Ago Quarter: $425 million
YoY Growth: 34.4%
Share Repurchases:
1.4 million shares repurchased for $309 million
Cash Position:
Cash and Equivalents: $7.37 billion
Long-Term Debt: $2.98 billion
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.