Intuit trades at 3.27x sales after 38% drop, raises guidance

Intuit Inc. reported Q3 fiscal 2026 revenue of $8.56 billion, up 10.4% year over year, and raised its full-year growth guidance to about 13%.

"The results reflect strong momentum across our platform, with AI-powered experiences driving deeper customer engagement," Chief Executive Officer Sasan Goodarzi said.

The company posted earnings per share of $12.80, beating the consensus estimate of $12.57 by $0.23. Global Business Solutions revenue rose 15.3% to $3.29 billion, while the Consumer segment grew 7.5%, driven by Credit Karma's 14.9% increase. Intuit guided fiscal 2026 EPS to $23.80-$23.85, above the prior consensus of $23.21.

The stock has fallen 38.2% over the past three months, compared with the industry's 0.9% gain, pushing its forward price-to-sales multiple to 3.27x — roughly half the software industry average of 6.33x. The discounted valuation and raised guidance have created a debate among investors about whether the selloff is overdone.

The company's DIY tax segment underperformed during the peak filing season, with management citing price sensitivity among filers earning less than $50,000 annually. Intuit said it "lost on price" in that segment and plans to refine its offerings and pricing structure. Total costs and expenses rose to $4.54 billion from $4.03 billion a year earlier, and the company announced a 17% workforce reduction with $300 million to $340 million in expected restructuring charges, largely in the fourth quarter.

The weakness in DIY tax was offset by strength in higher-value assisted offerings. TurboTax Live is expected to account for about 53% of total TurboTax revenue in fiscal 2026, with customer count projected to grow 38% and revenue 36%. Credit Karma revenue rose 14.9%, and management noted that average revenue per user is about 30% higher for customers using both TurboTax and Credit Karma.

Intuit's Mailchimp unit launched Analytics AI in May 2026, a conversational tool that lets marketers query campaign performance and revenue data in plain language. The feature is integrated with QuickBooks, part of a broader push to embed artificial intelligence across the company's product suite.

The Zacks Consensus Estimate for fiscal 2026 EPS has risen 58 cents to $23.79 over the past 30 days, implying 18.1% growth from the prior year. Of 32 analysts covering the stock, 24 rate it a Buy, six a Hold and two a Sell, with an average price target of $514.58 — about 83% above the current trading price of $281.77.

The guidance raise signals management expects AI-driven demand to sustain momentum through the remainder of the fiscal year. Investors will watch fourth-quarter results in August for evidence that the DIY segment is stabilizing and that restructuring costs are tracking within expectations.

This article is for informational purposes only and does not constitute investment advice.