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Deduction of elevated SBC (10.4%) grounds the valuation in true economic reality.
Market implied expectations (9.1% growth) sit below internal valuation cross-checks (14%).
Intuit continues to dominate the SMB accounting and DIY consumer tax markets. Despite mature top-line rates, high switching costs and cross-selling into an evolving digital ecosystem underpin sustained double-digit growth and resilient cash generation.
Intuit continues to dominate the SMB accounting and DIY consumer tax markets. Despite mature top-line rates, high switching costs and cross-selling into an evolving digital ecosystem underpin sustained double-digit growth and resilient cash generation.
High switching costs in core accounting software (QuickBooks) limiting SMB defection.
Strong network effects and cross-selling capabilities within the Intuit ecosystem.
Market implied expectations (9.1% growth) sit below internal valuation cross-checks (14%).
A compelling Buy. Intuit's durable economic moat and cash generative profile provide a strong foundation, with the current $396 price offering an attractive entry point relative to our conservative $486 fair value estimate.
Intuit Inc. provides financial management, payments and capital, compliance, and marketing products and services in the United States. The company operates in four segments: Global Business Solutions, Consumer, Credit Karma, and ProTax. The Global Business Solutions segment provides QuickBooks services, which include financial and business management online services, desktop software, payroll solutions, time tracking, merchant payment processing and bill pay solutions, checking accounts, and financing services for small and mid-market businesses; and Mailchimp, a marketing automation and customer relationship management. This segment also offers QuickBooks online services and desktop software solutions comprising QuickBooks Online, QuickBooks Live, QuickBooks Online Advanced, QuickBooks Self-Employed, QuickBooks Solopreneur financial and business management offerings, QuickBooks Online Payroll, QuickBooks Checking, QuickBooks Desktop software subscriptions, and QuickBooks Assisted Payroll. The Consumer segment provides do-it-yourself and assisted TurboTax income tax preparation products and services. The Credit Karma segment offers consumers with a personal finance platform that provides recommendations for credit card, home, auto, and personal loan, and insurance products; online savings and checking accounts; and access to its credit scores and reports, credit and identity monitoring, credit report dispute, credit building tools, and tools. The ProTax segment provides Lacerte, ProSeries, and ProFile desktop tax-preparation software products; and ProConnect Tax Online bill pay tax products, electronic tax filing service, and bank products and related services. It sells products and services through direct sales channels, multichannel shop-and-buy experiences, mobile application stores, and partner and other channels. Intuit Inc. was founded in 1983 and is headquartered in Mountain View, California.
A combined macro shock and IRS direct intervention. SMB bankruptcies spike, collapsing QuickBooks seat growth and Mailchimp cross-sells. Concurrently, IRS Direct File captures 20% of the simple return market. Operating margins compress to 25% as fixed R&D and elevated SBC (10.4% of revenue) deleverage.
High switching costs in core accounting software (QuickBooks) limiting SMB defection.
Strong network effects and cross-selling capabilities within the Intuit ecosystem.
Entrenched brand equity in consumer tax preparation (TurboTax).
Economic profit is supported when reported returns exceed the company cost-of-capital hurdle.
Unavailable
FCFF DCF remains positive at the base case: base FCFF $4.7B after capex $188.3M, with terminal value at 61.3% of enterprise value. No FCF cliff is projected unless capex/ or materially resets.
If tax unit growth exceeds 3%, expect multiple expansion. If SMB churn spikes >10%, expect a mid-teens price correction.
If tax unit growth exceeds 3%, expect multiple expansion. If SMB churn spikes >10%, expect a mid-teens price correction.
If tax unit growth exceeds 3%, expect multiple expansion. If SMB churn spikes >10%, expect a mid-teens price correction.
Asset-light model (capex <1% of revenue) enables high free cash flow conversion, funding aggressive share repurchases and strategic M&A regardless of cycle.
SMBs rapidly digitize operations and consolidate vendors, driving ecosystem adoption. Favorable employment trends support consumer tax filings.
Economic contraction curbs new business formation and increases failures, stalling seat expansion and reducing transaction volumes.
Asset-light model (capex <1% of revenue) enables high free cash flow conversion, funding aggressive share repurchases and strategic M&A regardless of cycle.
Core portfolio holding given high visibility and wide moat. Size up to 5% active weight.
Trim if valuation multiple exceeds 30x forward earnings or if structural impairment emerges from government tax initiatives.
Market implied expectations (9.1% growth) sit below internal valuation cross-checks (14%).
Conservative DCF modeling ($486 FV) still yields >20% upside from current levels.
Buy. Intuit’s entrenched moats in SMB accounting and consumer tax provide high cash flow visibility. The current valuation embeds undue skepticism regarding terminal growth and margin stability, offering a compelling margin of safety for long-term compounders.
Upside case: Deduction of elevated SBC (10.4%) grounds the valuation in true economic reality. Downside case: Market implied expectations (9.1% growth) sit below internal valuation cross-checks (14%).
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The IRS Direct File initiative scales aggressively, capturing material TurboTax share. SMB churn rises amid macroeconomic stress, stalling Mailchimp synergies and pressuring core margins as fixed costs deleverage.
Government filing service expands beyond simple returns, permanently impairing TurboTax volume and pricing power.
Prolonged recession triggers a wave of SMB insolvencies, driving double-digit churn in QuickBooks and Mailchimp.
Synergies between QuickBooks and Mailchimp fail to materialize, leading to substantial goodwill impairment ($13.9B total goodwill) and stunted ARPU.
The five developments that would weaken our investment case.
Top-line deceleration indicates customer churn toward free government filing options and consumer resistance to consumer tax preparation pricing, threatening core consumer segment cash flows and overall corporate growth velocity.
Current:15.6% for the period ended 2025-07-31
Alert if< 10.0% year-over-year over two consecutive quarters
Declining return on capital signals severe macroeconomic pressure on small business customers and elevated subscriber cancellations, which reduces recurring ecosystem cash flow and dampens expected returns from large software acquisitions.
Current:15.2% as of the report's 2026-05-09 analysis date
Alert if< 12.0% over four consecutive quarters
A drop in cash flow conversion indicates that heavy share-based employee compensation and working capital inefficiencies are diluting real free cash generation, limiting available capital to repurchase shares or fund strategic growth initiatives.
Current:1.604 as of the report's 2026-05-09 analysis date
Alert if< 1.25 over two consecutive quarters
Compressing gross profitability reflects failed cross-selling synergies across marketing platforms and elevated customer onboarding costs, signaling pricing friction and diminishing monetization potential across small and medium enterprise customer cohorts.
Current:79.6% for the period ended 2025-07-31
Alert if< 76.0% over two consecutive quarters
Failure to expand operating efficiency demonstrates severe cost inflation across engineering and customer support, breaking the fundamental operating leverage assumption required to sustain robust operating profit expansion.
Current:26.2% for the period ended 2025-07-31
Alert if< 24.0% over two consecutive quarters
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
AI-driven product enhancements drive rapid ARPU expansion across the QuickBooks and Mailchimp installed bases. Credit Karma rebounds strongly with a more favorable macroeconomic environment, re-accelerating overall revenue to mid-teens.
Intuit maintains dominance in SMB and consumer tax. Despite mature top-line rates, high switching costs underpin sustained double-digit growth. Operating margins stabilize at 28%, delivering consistent free cash flow generation.
Warning level: < 10.0% year-over-year over two consecutive quarters. Top-line deceleration indicates customer churn toward free government filing options and consumer resistance to consumer tax preparation pricing, threatening core consumer segment cash flows and overall corporate growth velocity.
Warning level: < 12.0% over four consecutive quarters. Declining return on capital signals severe macroeconomic pressure on small business customers and elevated subscriber cancellations, which reduces recurring ecosystem cash flow and dampens expected returns from large software acquisitions.
Warning level: < 1.25 over two consecutive quarters. A drop in cash flow conversion indicates that heavy share-based employee compensation and working capital inefficiencies are diluting real free cash generation, limiting available capital to repurchase shares or fund strategic growth initiatives.
Warning level: < 76.0% over two consecutive quarters. Compressing gross profitability reflects failed cross-selling synergies across marketing platforms and elevated customer onboarding costs, signaling pricing friction and diminishing monetization potential across small and medium enterprise customer cohorts.
Warning level: < 24.0% over two consecutive quarters. Failure to expand operating efficiency demonstrates severe cost inflation across engineering and customer support, breaking the fundamental operating leverage assumption required to sustain robust operating profit expansion.
| $14.37B |
| $16.29B |
| $18.83B |
| +14.0% |
| Gross profit | $10.32B | $11.23B | $12.82B | $14.98B | +13.2% |
| Operating income | $2.62B | $3.24B | $3.79B | $5.08B | +24.7% |
| Net income | $2.07B | $2.38B | $2.96B | $3.87B | +23.3% |
| EPS (diluted) | $7.28 | $8.42 | $10.43 | $13.67 | +23.4% |
| EBITDA | $3.37B | $4.04B | $4.58B | $5.89B | +20.5% |
| R&D | $2.35B | $2.54B | $2.75B | $2.93B | +7.7% |
| SG&A | $5.00B | $5.06B | $5.73B | $6.64B | +9.9% |
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Revenue | 18,831,000,000 |
|---|---|
| Cost of revenue | 3,848,000,000 |
| Gross profit | 14,983,000,000 |
| Operating expenses | 10,045,000,000 |
| Operating income | 4,938,000,000 |
| Non-operating items and tax | -1,069,000,000 |
| Net income | 3,869,000,000 |
| Total assets | 36,958,000,000 |
|---|---|
| Cash | 2,884,000,000 |
| Current assets | 14,107,000,000 |
| Total liabilities | 17,248,000,000 |
| Current liabilities | 10,370,000,000 |
| Shareholders’ equity | 19,710,000,000 |
Point-in-time financial data used in the 2026-05-09 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022-07-31 | 12.7B | 3.4B | 2.1B | 3.9B | 3.7B | 229M | 746M | 1.3B | 1.9B | 774M | 4.9B | — | — | — | — | 2.8B | 7.5B | 20.1% | — | 7.5% | — |
| 2023-07-31 | 14.4B | 4B | 2.4B | 5B | 4.8B | 260M | 806M | 1.7B | 2B | 889M | -810M | — | — | — | — | 2.8B | 6.7B | 21.9% | — | 9.0% | — |
| 2024-07-31 | 16.3B | 4.6B | 3B | 4.9B | 4.6B | 250M | 789M | 1.9B | 2B | 1B | -89M | — | — | — | — | 3.6B | 6.6B | 23.7% | — | 9.3% | — |
| 2025-07-31 | 18.8B | 5.9B | 3.9B | 6.2B | 6.1B | 124M | 809M | 2B | 2.8B | 1.2B | -71M | — | — | — | — | 2.9B | 6.6B | 26.2% | — | 9.7% | — |
INTU trades at 15.0x forward earnings against a peer median of 17.4x; EV/EBITDA of 18.6x against a peer median of 22.9x; 6 peers.
| Initiate or add here. |
| Salesforce Inc. |
| 12.2x |
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| 12.4% |
| 19.2% |
| SHOP | Shopify Inc. | 47.5x | 11.6x | 64.1x | 11.3% | 15.7% |
| ADBE | Adobe Inc. | 9.6x | 4.2x | 10.7x | 58.8% | 38.8% |
| CDNS | Cadence Design Systems Inc. | 38.7x | 18.1x | 50.4x | 20.7% | 29.7% |
