Intuit $INTU: Selling Puts for 16% Yield Amid Stock Slump

Selling put options on Intuit Inc. ($INTU+WL) presents an opportunity for investors to generate income, with a potential annualized yield of up to 15.7%. This strategy involves selling a put option with a strike price of $230, expiring on June 17, 2027, which could yield approximately $2,080 in premium per contract. This premium, combined with a 5.0% yield from the secured cash collateral in a money market or savings account, forms the basis of the income generation.

If $INTU+WL remains above the $230 strike price by expiration, the option expires worthless, and the investor keeps the full premium, representing a 9.0% return over 311 days. If the stock falls below $230, the investor is assigned shares at $230, with the premium received effectively lowering the purchase price to approximately $209.20, a discount of about 37% from the current trading price of $334.43. This strategy is predicated on the investor's willingness to acquire $INTU+WL shares at this discounted entry point.

Despite the potential for income generation, investors should consider Intuit's business dynamics. While TurboTax Live revenue is projected to grow 36% and constitutes 53% of TurboTax revenue, the original do-it-yourself tax business is facing challenges with price-sensitive consumers, and the overall tax market is experiencing a slight decline. The company is also undergoing workforce reductions, aiming for a 17% decrease in full-time employees.

### Story Arc / How We Got Here Intuit Inc. ($INTU+WL) is currently being examined for strategies to generate income through options, as the stock trades significantly below its 52-week high. This follows a period where the company faced a securities fraud class action lawsuit alleging misleading statements about TurboTax's competitive advantages, which occurred after a more than 20% stock price drop. Investors can find prior coverage at /explore/intuit-faces-class-action-over-pricing-issues-after-20-stock-drop.