If the recession has taught consumers and small businesses anything, it is how to do more with less.
Enter Intuit  . The financial-software and services firm best known for Quicken and TurboTax, products that made managing household finances and tax preparation almost easy, has quietly become a force for small businesses owners as well. The firm derived 39% of its $4.15 billion in fiscal 2012 revenue from its small-business segment, which includes its QuickBooks financial-management tools. Intuit has a dominant share in many of its businesses, including online tax preparation, small-business payroll and financial management.
Investors, however, have been unimpressed. Intuit stock (ticker: INTU) has "completely underperformed" the market in the past 12 months, says James Lane, an analyst and consultant to Northstar Investment Management in Chicago. He says the shares are undervalued and could jump nearly 30% in the next 18 to 24 months, from the high $50s now to the mid-$70s.
INVESTORS APPEAR TO UNDERESTIMATE how much Intuit's businesses are being turbocharged by the growing popularity of mobile devices.
This is helping Intuit, which has a $17 billion stock-market value, overcome a major challenge—expanding its 60-million customer base. "People are so much more comfortable using the smartphone and the tablet, where they can use software and try it more easily," Neil Williams, the company's chief financial officer, tells Barron's .
Intuit, which has more than 50 mobile applications, has seen customers using cloud-based services grow from 17 million in 2008 to 45 million. In the past five years, since Apple introduced the iPhone, revenue from Intuit's "connected services," which hosts software programs from all business units on Intuit's servers, has grown from less than half the firm's revenue