INTU Trade Idea Post Earnings

24 авг.

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:

1. Positive Earnings Report: The earnings were bullish, suggesting potential for further upside.
   
2. Strong Buyers Support: The steady buying throughout the day and the close above VWAP indicate strong buyer interest.
   
3. 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:

1. 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.
   
2. 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.
   
3. 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