Intuit's (INTU) better-than-expected fiscal Q3 results were driven by strong growth in TurboTax Live and Consumer Tax revenue, Morgan Stanley said Friday in a research note.

The company reported non-GAAP earnings of $11.65 per diluted share for the quarter ended April 30, ahead of the Street consensus of $10.93. Revenue rose to $7.75 billion, topping expectations of $7.57 billion. Intuit also raised its fiscal 2025 revenue and EPS guidance.

TurboTax Live revenue jumped 47% year over year, with unit growth of 24%, a sharp acceleration from last year's 17% and 12%, respectively. Consumer Tax revenue grew 11% year over year, beating the Street's 8% estimate, which likely prompted management to raise its fiscal 2025 segment outlook from 7-8% to 10%, the brokerage said.

Credit Karma revenue surged 31%, far exceeding the Street's 2% forecast, driven by strength across credit cards, personal loans, and auto insurance. Excluding Mailchimp, Intuit's online ecosystem remained resilient with 24% year-over-year growth.

"With FY25 revenue targets moving higher and margins expanding 100bps YoY, EPS growth of 18-19% YoY should well justify further expansion in the multiple towards historical levels," according to the note.

Morgan Stanley maintained an overweight rating on the stock and raised the price target to $785 from $720.

Shares of Intuit were up nearly 9% in recent trading.

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