Should You Buy Intuit Stock Before the Huge Investor Update?

SUMMARY

Parkev Tatevosian, CFA, analyzes Intuit's recent stock performance and long-term prospects amid concerns about artificial intelligence disrupting its business. He discusses the company's financial growth, operational improvements, and current valuation, ultimately maintaining a cautious buy rating due to ongoing uncertainty.

MAIN POINTS

• Intuit's stock has rebounded from its lows but remains down 50% year-to-date as investors await the upcoming quarterly report. [0:00]
• Despite recent recovery, concerns persist about the impact of agentic AI on Intuit's market share and future growth. [1:00]
• Wall Street analysts project double-digit revenue growth for Intuit through 2028, though at a slower pace than previous years. [2:01]
• Intuit's operating profit margin and return on invested capital improved significantly after cost-cutting and restructuring in late 2022. [3:00]
• The company's low forward price-to-earnings ratio reflects market fears about AI-driven disruption, despite strong financial metrics. [4:01]
• Due to persistent uncertainty around AI, the stock is rated a buy with low conviction, as the future impact on Intuit remains unclear. [5:00]

DETAILED ANALYSIS

Intuit has experienced a volatile year, with its stock price declining nearly 50% year-to-date in 2026 before showing signs of recovery ahead of its scheduled financial update on August 25th. The company's long-term growth trajectory has been robust, with revenue increasing from $5 billion in 2017 to $21 billion in the latest trailing twelve months, driven by both acquisitions and organic expansion. However, the emergence and rapid advancement of artificial intelligence, particularly agentic AI, has raised concerns among investors about potential market share erosion as competitors leverage new technologies to offer similar services.

Wall Street analysts remain optimistic, forecasting double-digit revenue growth for Intuit through at least 2028, though this represents a slowdown from the over 20% annual growth seen in 2021 and 2022. The recent deceleration is attributed to the normalization following a period of accelerated growth due to acquisitions. In response to macroeconomic uncertainty and rising interest rates in late 2022, Intuit undertook significant cost-cutting and restructuring measures, which led to a notable improvement in operational efficiency.

The operating profit margin increased from below 20% in 2022 to over 27%, and returns on invested capital reached 17.2%, well above the company's estimated weighted average cost of capital.

Despite these strong financial indicators, Intuit's valuation remains subdued, with a forward price-to-earnings ratio of just 10.9—levels more typical of companies with much slower growth and lower profitability. This disconnect is largely attributed to investor fears that AI could significantly disrupt Intuit's business model, as has happened in other sectors. While there is no concrete evidence yet of AI materially impacting Intuit's financial performance, the uncertainty is enough to warrant caution.

As a result, the stock is considered an attractive opportunity at current valuations, but the recommendation is tempered by low conviction due to the unpredictable nature of technological disruption.

LINKS

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