Intuit Inc. (NASDAQ:INTU) recently reported third-quarter results, announced a 17% workforce reduction, and issued a weaker-than-expected outlook.
• What’s the outlook for INTU shares?
Q3 Results Beat Estimates
Intuit reported third-quarter revenue of $8.56 billion, topping estimates of $8.53 billion. Adjusted earnings came in at $12.80 per share, above the $12.28 per-share estimate.
Intuit expects full-year revenue of $21.34 billion to $21.37 billion, above estimates of $21.23 billion. Also, it raised adjusted EPS guidance to $23.80-$23.85 from $22.98-$23.18, versus estimates of $23.20.
Analyst’s View
BofA Securities analyst Tal Liani reinstated coverage on Intuit with a Buy rating and a $400 price target.
After a 55% decline over the past year and a further ~20% drop post recent results, the analyst sees an attractive setup supported by improving fundamentals.
The analyst highlights Intuit's high-quality franchise, growth runway and best-in-class margins (~40% operating margin and ~35% free cash flow margin) as not fully reflected in the current valuation.
Liani writes that pressure in sub-$50K households points to continued DIY tax weakness, driven by AI-based and free alternatives.
However, Intuit is increasingly shifting users toward higher-value assisted offerings, which make up ~88% of the $42 billion U.S. tax market, adds the analyst.
The analyst expects Online Services growth of 17–19% through 2026–2028, driven by Enterprise Suite and QuickBooks Advanced expansion into mid-market customers.
While AI is intensifying low-end competition and automating parts of tax and accounting workflows, its overall impact is more complementary than disruptive, adds the analyst.
Liani says the core opportunity remains in assisted tax services, where trust and expertise are key, while QuickBooks' entrenched position limits displacement risk.
INTU Stock Price Activity: Intuit shares were up 0.97% at $307.30 at the time of publication on Wednesday.
Photo via Shutterstock
Login to comment