TLDR
- Intuit beat Q4 estimates with EPS of $4.03 vs $3.54 expected and revenue of $4.35B vs $4.27B expected, but the stock dropped 11% after hours.
- FY27 revenue growth guidance came in at 9-10%, down from 14% in FY26 and below the 12% Wall Street expected.
- TurboTax growth was guided to just 2-3%, well below the 6.8% analysts had forecast, raising concerns about AI competition.
- JPMorgan and Bank of America both downgraded INTU to Neutral, with JPMorgan slashing its price target from $605 to $331.
- Bulls including Mizuho and Jefferies held their Outperform ratings, with price targets ranging from $380 to $500.
Intuit dropped around 11% after hours following its fiscal Q4 earnings report, hitting $318 before settling near $339.75 in Wednesday trading. The stock is currently down roughly 3.5% on the day.
The numbers themselves were solid. Intuit posted Q4 EPS of $4.03 against estimates of $3.54, a beat of nearly 14%. Revenue came in at $4.35 billion, up 13.6% year-over-year and ahead of the $4.27 billion consensus.
But the guidance is what moved the stock.
Management guided FY27 revenue between $23.28 billion and $23.51 billion, implying growth of 9% to 10%. That is down from 14% growth in FY26 and falls short of the $23.72 billion analysts had pencilled in.
The TurboTax number is what really caught attention. Intuit guided for just 2% to 3% TurboTax growth, well below the 6.8% the Street was expecting. The company also lowered its long-term growth target for its Global Business Solutions segment to 10-15%, down from a prior range of 15-20%.
Intuit attributed the weaker outlook to softer Mailchimp sales, ongoing declines in desktop products, and lower average revenue per TurboTax customer after pricing changes designed to attract more users.
Wall Street Reacts With Downgrades
JPMorgan downgraded INTU to Neutral from Overweight, cutting its price target to $331 from $605. Analyst Samik Chatterjee said disruption risks have moved beyond TurboTax and are now expanding into the QuickBooks-focused Global Business Solutions segment. Chatterjee flagged slowing new customer additions across both product lines and noted management declined to commit to a timeline for returning to double-digit growth.
Bank of America also cut the stock to Neutral from Buy, lowering its price objective to $360 from $400. Analyst Tal Liani said TurboTax appears to be losing market share to lower-cost AI-based alternatives rather than trading users up into higher-value assisted offerings. BofA noted online customer count in the enterprise segment grew just 3% year-over-year.
Both banks expect FY27 to be a heavy investment year, with Intuit pushing lower pricing and promotional offers to rebuild its customer pipeline. That spending is expected to weigh on margins in the near term.
Bulls Stay Constructive
Not everyone turned negative. Mizuho kept its Outperform rating with a $430 price target, pointing to FY27 profitability guidance that came in above Street estimates. Jefferies maintained its Buy rating with a $500 target, trimmed from $550, calling the guidance “conservative.”
BMO Capital and Oppenheimer also held Outperform ratings at $412 and $380 respectively. The overall consensus remains 24 Buy, 9 Hold, and 2 Sell.
Valuation Picture
At current levels, INTU trades at 13.1x forward earnings with an 8.8% free cash flow yield and 81% gross margins. One fair value estimate puts the stock at $557.71, implying upside of around 64% from current prices.
Non-GAAP EPS guidance for FY27 came in at $22.88 to $23.12, roughly 15-16% below the prior consensus of $27.30.
“Big bets” including mid-market, assisted tax, and money management grew 34% and now represent 30% of total revenue, but are not yet large enough to offset the TurboTax slowdown.
The first real test of the new guidance will come with Q1 FY27 results on December 1.
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