Intuit (INTU) Beats the Quarter but Guidance Falls Short
Intuit (INTU) stock dropped after its latest quarterly report, took a sharp dive, then recovered part of the loss. Shares traded around $344, down about 3.5%. The move down was modest because the report was mixed: quarterly results beat expectations, but the guidance caused the problem.
Fourth-quarter adjusted earnings came in at $4.30 per share on revenue of $4.35 billion, beating estimates on both the top and bottom line.
The full-year outlook was weak. Intuit (INTU) expects earnings between $22.88 and $23.12 per share, well below the $27.34 the street wanted - a large miss. Revenue is guided between $23.3 and $23.5 billion, which implies 9% to 10% growth from the prior year. That is below estimates and a slowdown from the 14% revenue growth Intuit (INTU) posted in fiscal 2026.
AI Pricing Pressure Behind the Weak Outlook
The CEO tried to get ahead of the reaction, saying the company is focused on gaining market share in a competitive market. As AI software gets more powerful, Intuit (INTU) has to make choices like staying competitive on pricing. That pricing choice is a main reason the guidance sits below what analysts expected.
Analyst Reactions: Downgrades and Target Cuts
Several firms cut ratings and price targets:
- JP Morgan downgraded to neutral from overweight, target $331, down from $605, and below the current $344 price. It warned that AI disruption risk is spreading beyond TurboTax to the QuickBooks business, and that the valuation multiple could stay pressured until investors get more comfort around execution to limit disruptions.
- BofA downgraded to neutral from buy, target $360, down from $400. It said the weak guidance shows trends contrary to investor expectations, and that results suggest TurboTax is losing share to lower-cost AI-based rivals.
- Truist cut its target to $300 from $350, below the current price, keeping a hold rating. It called Q4 solid but the guidance disappointing, with the outlook even below its own muted expectations, while staying confident in medium- and long-term growth.
- BMO kept an outperform rating and a $412 target. It noted revenue guidance of 9% was nearly a point below its own already-reduced outlook, and said catalysts may take time to appear but will emerge, leaving room for upside.
- Oppenheimer lowered its target to $380 from $406, keeping outperform. Guidance for revenue, operating income, and EPS all came in below its estimates, but not enough to change the rating.
Two firms raised targets without a strong bullish case, likely because their prior numbers were too low:
- Stifel raised its target to $300 from $275, kept a hold, and said "foundations take time," expecting Intuit (INTU) to lag other large-cap application peers for longer.
- Piper Sandler raised its target to $290 from $250 but kept an underweight rating.
The pattern matches many other names: AI is a large opportunity but also a risk to the existing business.
Example Trade
The report is confusing, and the stock recovered off its pre-market bottom. Betting that Intuit (INTU) stays in a range over the next several weeks, one approach is selling an iron condor using the September 18th expiration, a bit further out than usual. That means selling the 320/310 put spread on the downside and the 375/385 call spread on the upside, collecting $5. The break-evens on September 18th are $315 on the downside and $380 on the upside, giving a solid range.
Broader Market Note
Markets traded sideways in a holding pattern ahead of Nvidia (NVDA), with mixed data: sticky inflation but a resilient economy in durable goods and GDP. The conflicting reports make direction hard to read. For the Fed, the view is status quo - no action expected - with inflation front and center, and attention on comments due Friday.
