Wolfe Research downgraded Intuit from Outperform to Peerperform, citing concerns over slowing growth in the company’s core tax segment despite strong overall revenue performance.
The analyst highlighted a fiscal 2027 guidance shortfall, projecting tax segment revenue growth of just 2% year-over-year, well below the firm’s expectation of over 5%. Intuit’s total revenue for the fourth quarter reached $4.354 billion, a 14% increase that exceeded expectations by 2.1%. The Global Business Solutions Group, which includes TurboTax and other products, generated $3.424 billion in revenue, up 14% year-over-year, driven by 38% growth in midmarket products and 20% growth in online accounting.
Credit Karma revenue rose 16.5% year-over-year, outpacing consensus expectations of 11.6%, supported by growth in personal loans, auto insurance, and credit cards. The company also reported an 81% gross profit margin and a P/E ratio of 21.03, with a Piotroski Score of 9.
Intuit’s fiscal 2027 revenue growth guidance of approximately 9% year-over-year, or $23.396 billion, falls short of the 11% consensus estimate. Earnings per share growth is projected at 23%, with a commitment to durable high-teens growth over the medium term. The Global Business Solutions Group, excluding Mailchimp, is expected to grow around 13% year-over-year, with a three-year target of 10% to 15%. Credit Karma revenue is projected to rise 11.5%.
Intuit’s stock, trading at $343, has declined 45% year-to-date. Price target adjustments followed Wolfe’s downgrade, with Truist Securities and Wells Fargo lowering their targets to $300. Piper Sandler and Stifel raised their targets to $300 and $290, respectively, while maintaining Hold ratings. BMO Capital retained an Outperform rating with a $412 price target.
