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Valued at a market cap of $183.2 billion, Mountain View, California-based Intuit Inc. (INTU) is a global financial and business software company that provides tools and services for small businesses, consumers, and accounting professionals. Its offerings include QuickBooks for business management, TurboTax for tax preparation, Credit Karma for personal finance solutions, and ProConnect for professional accountants.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Intuit fits this criterion perfectly, exceeding the mark. Intuit sets itself apart by leveraging technology and innovation to empower individuals and businesses worldwide, addressing financial challenges while driving economic opportunity and sustainability.
Despite this, the company has experienced an 8.4% dip from its 52-week high of $714.78 achieved on Nov. 13. INTU saw an increase of 5.1% in its share price over the past three months, underperforming the broader iShares Expanded Tech-Software Sector ETF’s (IGV) return of 29.7% during the same period.
In the long term, Intuit’s shares have soared 4.7% on a YTD basis, lagging behind IGV's 35.4% gain. In addition, INTU's shares have increased 14.8% over the past 52 weeks, lagging behind IGV's nearly 40% return over the same time frame.
Intuit's stock has demonstrated resilience recently, maintaining levels above its 50-day and 200-day moving averages since early November.
Intuit has underperformed due to challenges in maintaining strong revenue growth amidst increasing competition in its core tax and financial software markets and growing skepticism about the profitability of its heavy investment in generative AI technologies. Economic headwinds, including higher interest rates and reduced consumer spending, have tempered demand for its small business and consumer-focused products.
Moreover, the stock fell over 5% after issuing forward guidance that fell short of expectations, projecting Q4 earnings of $2.55 per share - $2.61 per share and revenue of $3.8 billion - $3.9 billion, below Wall Street's forecasts. Despite beating Q3 estimates with EPS of $2.50 and revenue of $3.3 billion on Nov. 21, the company anticipates a single-digit revenue decline in its consumer segment. Additionally, concerns over competition from a proposed federal tax filing app further pressured the stock.
In comparison, its rival, Palantir Technologies Inc. (PLTR) has outperformed INTU, with shares of PLTR surging 279.6% over the past 52 weeks and 306.8% on a YTD basis.
Despite INTU’s underperformance over the past year, analysts are bullish, with a consensus rating of "Strong Buy" from 28 analysts. It is currently trading below the mean price target of $733.60.
