FEATURED

• Q3 revenue $8.56B (+10% YoY), slightly above the $8.54B consensus; adjusted EPS of $12.80 beat estimates of ~$12.57
• Stock dropped 20% on May 21, closing at $307.07 — just above the 52-week low of $302.36, down ~40% from the July 2025 peak near $814
• 17% workforce cut (~3,000 employees) announced the same day as earnings; restructuring charges of $300–$340M expected this quarter
• TurboTax paying units still expected to grow 2% for the full year, but pressure among DIY filers earning under $50K dragged results — total IRS filings declining ~30bps, roughly 2 million units short of expectations
• Assisted Tax now 53% of TurboTax revenue — 36% revenue growth, 29% new customer growth — the strongest segment in the quarter
• Global Business Solutions up 15% overall (17% ex-Mailchimp); online ecosystem revenue +19% (22% ex-Mailchimp); Credit Karma +15%
• Full-year guidance raised to $21.34–$21.37B revenue (13–14% growth), $23.80–$23.85 adjusted EPS; dividend up 15% to $1.20/share
• Forward P/E compressed to ~14–15x vs. a 5-year average above 50x; 34 analysts at Strong Buy consensus, average target ~$592

Wednesday evening, Intuit dropped two things on the market at the same time. Earnings — which were actually fine. And a 17% workforce reduction that wasn’t fine, at least not in terms of how the market absorbed it. The stock closed down 20% on May 21. That takes the total drawdown from the July 2025 peak to somewhere north of 40%. At $307, INTU is sitting just above its 52-week low of $302.36.

Here’s the thing — the numbers themselves weren’t a disaster. $8.56B in revenue, slightly above the $8.54B consensus. Adjusted EPS of $12.80 against estimates around $12.57. Full-year guidance was raised, not cut. The company bought back $1.6B in stock during the quarter, more than double the year-ago period, and raised the dividend 15% to $1.20/share. By the metrics that usually hold a stock up, this wasn’t a miss.

What spooked people was the combination — the layoffs alongside a softer-than-expected TurboTax season alongside a Mailchimp business that’s shrinking. All three things hitting the same quarter, same conference call, same night.

The TurboTax data is worth sitting with. CEO Sasan Goodarzi disclosed that total IRS filers are expected to decline roughly 30 basis points this season — that’s an industry-wide contraction of about 2 million filings versus expectations, the most significant pullback since the post-COVID surge reversed. The pressure was concentrated at the low end: DIY filers earning under $50,000 a year. Those customers are the most price-sensitive, and Goodarzi acknowledged plainly that Intuit lost on price in that segment. Standard product line revenue declined mid-teens. TurboTax online paying units are still projected to grow 2% for the full year, but the growth is coming from higher-ARPU filers, not volume expansion.

Slight tangent, but it matters: the IRS has been quietly expanding its own free direct-file program. It’s not yet at a scale that moves the needle dramatically, but it’s real and it’s growing. The 2 million unit gap this season may not be entirely cyclical.

Mailchimp is the other piece of this that doesn’t get discussed enough. The platform declined slightly year-over-year. Management framed it as a rightsizing — aligning costs with actual growth potential — but that’s a careful way of saying the acquisition hasn’t performed the way investors hoped. Global Business Solutions grew 15% overall, 17% excluding Mailchimp. The company is closing its Reno and Woodland Hills offices. The drag is real.

Now zoom out from those two problem areas.

Assisted Tax — Intuit’s push into the $37 billion professional tax preparation market — grew revenue 36% and added new customers at a 29% clip. It now represents 53% of total TurboTax franchise revenue. That’s not a minor footnote. That’s a business inside the business that is growing faster than most standalone software companies and is going after an addressable market that Intuit historically had no real presence in. Credit Karma was up 15%. Online payments volume grew 30%. The QuickBooks ecosystem ex-Mailchimp grew 22%. These aren’t defensive numbers — they’re genuinely good.

The balance sheet is intact. About $6.8B in cash and investments against $6.2B in debt. GAAP operating income of $4.0B, non-GAAP at $4.7B. Net income $3.06B. The company generates serious cash and returned a lot of it to shareholders this quarter specifically. That matters when you’re trying to assess whether the selloff is fundamental or emotional.

What’s interesting is where the valuation sits right now. At $307, Intuit is trading at roughly 14–15x forward earnings. The 5-year average is above 50x. The trailing 12-month average P/E was 41.9x — the stock is now at less than half that. GuruFocus flags it as significantly undervalued against an intrinsic value estimate of $786. Thirty-four analysts polled by S&P Global maintain a Strong Buy consensus with an average price target around $592, implying over 90% upside from current levels. Post-earnings, TD Cowen cut its target to $504 (from $576), BMO moved to $412 (from $550), Truist dropped to $410 (from $500). Morgan Stanley kept its Buy.

The spread between where analysts think this goes and where it’s trading is unusually wide. That can mean one of two things: either the market is wrong and the opportunity is real, or the analysts haven’t fully updated their thinking to reflect a structural shift in the business model. Both are worth taking seriously.

On the AI side — Intuit has signed multi-year agreements with both OpenAI and Anthropic, embedding generative AI across TurboTax, QuickBooks, Credit Karma, and Mailchimp, and making Intuit’s tools accessible inside ChatGPT and Claude directly. CFO Sandeep Aujla’s argument is that Intuit’s models train on decades of actual filer and SMB financial data — not generalized internet content — and that distinction creates results no generic AI agent can replicate. It’s a credible argument. Whether the market believes it before it shows up in revenue is a different question. The irony of laying off 3,000 people while marketing AI efficiency tools to small businesses is not subtle, and it hasn’t been lost on anyone paying attention.

Price-wise, $302.36 is the number to watch. That’s the confirmed 52-week low, set intraday on May 21. A sustained close below that level opens a different conversation — one that points toward the $275–$280 range and removes the argument that the selloff was purely emotional. The stock closed at $307.07. It’s close enough to that floor that you have to respect it.

Volume on the decline was roughly 7x average daily volume. That’s institutional distribution. This wasn’t retail panic driving 20% down in a day — big money was moving out, and that creates overhead resistance on any recovery attempt. First real test to the upside is $330, then $350, then the pre-earnings zone near $375–$390. RSI moved into oversold territory intraday before partially recovering. Every major moving average is above the current price.

A bounce without volume confirmation and sector follow-through is just noise. Worth watching for a reclaim of $330 with meaningful participation before reading anything into it.

What I keep coming back to is this: the business generating the most excitement inside Intuit right now — Assisted Tax — is growing 36% and now controls 53% of TurboTax revenue. That segment didn’t exist in a meaningful way three years ago. The same business that’s being punished for losing low-income DIY filers on price is simultaneously eating into H&R Block’s core market. Both things are true. The market is weighing the second one less right now. That may not last.

There are three ways this resolves over the next three to four quarters. One: the cost cuts land cleanly, Assisted Tax keeps accelerating, AI integration starts showing up in product metrics, and the stock works back toward $450–$500 as execution is demonstrated. Two: everything stabilizes at a slower growth rate — 10–12% revenue, modest EPS expansion, stock grinds sideways from the $307 level while the market waits for evidence. Three: Mailchimp continues deteriorating, AI-native competitors chip away at the SMB accounting base faster than Intuit responds, and the 2 million IRS filing gap proves structural rather than seasonal — in which case $302.36 breaks and the next stop is lower.

The next scheduled earnings report is August 20. Between now and then, any data point on Assisted Tax growth, Mailchimp stabilization, or early AI product traction will matter more than the macro. That’s what traders should be watching — not the size of last week’s move.

The era of paying 50x earnings for financial software may be over. Or it may just be paused. That’s genuinely unclear right now, and anyone telling you otherwise is more confident than the data supports.

For informational and educational purposes only. Not investment advice. Trading involves risk, including loss of principal.