The Truth About Intuit's Earnings Crash | INTU Stock Analysis

Added: 2026-05-21

[00:00:00]Hello everybody. Welcome back to another valuation investing video. And today in this video, I'm going to be going over into it stock guys because the stock just reported earnings. In it just reported their earnings. The stock is down over 15% on the full day. After hours, the stock is down about 10%. So in this video, I'll be going over that earnings report, talking about my position in this company, cuz I actually do have a small position in into its stock. what I'm looking at going ahead for the future of this company because this earnings wasn't amazing, but it wasn't bad and what this says about the entire software sector as a whole. Then I'll be using my intrinsic value calculator to take a further look to see why I think this is a good time to be buying this stock. So let's take a look at in it. As I said with into it, guys, it's starting to rebound a little bit after hours, but today the stock was down about 4%. The main reason for that was because in it says they're planning on cutting about 17% of their jobs for AI. So they're trying to be more efficient in terms of their jobs. I think that could be good for the future personally because if they cut their jobs and invest more in AI, that could definitely give them a greater return for the company. As a shareholder, I like that. Obviously, not for the economy standpoint, but as a shareholder, I think that's a good move by the business as long as they can continue to keep up with AI. But here's the thing. After hours, we're down about 9%. We were down over 10% at one point after hours. So, let's take a look at this earnings report. So, taking a look at these earnings, guys, before I do that, take a look at the link in the description. We have the Discord. It's a free Discord. You can join it, and I do these earnings grades on there. So this is just the simplified version of their earnings. Then I'll get into the deeper stuff about the earnings. But here it is. I am having into it earnings as a B.

[00:01:48]That's what I ranked it as. Because if we take a look at the revenue, guys, they grew about 10% year-over-year, which isn't amazing, but it's good enough. I normally want to see at least 10% growth, and they did hit that marker. Here's the problem with the earnings was the cost and expenses were a little bit elevated. As you can see, they grew 12% faster than the revenue, which you don't want to see. Obviously, expenses growing faster than the revenue because the operating income grew slower than the revenue. You want to see the revenue growing fast, but the expenses growing slower. That's what you want to see. So, the expenses were a bit elevated, which isn't great. The net income came in at about 9% growth rate, isn't terrible, but for this company, I was hoping for a little bit better growth. Here's the good thing though.

[00:02:34]They did buy back some shares. And with that being said, when they buy back shares, that's going to help the uh net income per share. As we can see, the EPS that EPS grew 11%. So, the earnings per share still grew in that double-digit range because of those buybacks, which I like. But overall, I gave this a B-grade. I wish the expenses weren't growing as fast. If they weren't growing as fast, this would definitely be an A or so grade. But these expenses really hurt this grading for in it. So now if we get into the more in-depth stuff about this earnings, guys, this is what their headline says from the website. In it reports strong thirdarter results and raises fullear revenue guidance, which is actually a surprise why the stock is down so much. I'm not really sure. This earnings looks pretty solid. Yes, the expenses grew a little bit faster, but they beat on both the top and bottom line for revenue and earnings and their guidance was raised. So, I don't see what was so bad here. If we take a look at the segments, the consumer revenue grew to 5.3 billion up 8%. Turboax revenue 4.4 billion up 7%. I think that might have been the problem here. I think we wanted the Turboax to grow faster since this was the quarter after the tax season. So this was obviously going to be a huge growth in terms of quarter over quarter but with that being said this doesn't look too bad but I think the Turbo tax we wanted to be greater. So I'm going to show you guys the forward looking guidance for into it and this looks pretty solid revenue of 21.341 billion to 21.374 billion for 2026 growth of approximately 13 to 14%. That's pretty strong.

[00:04:16]operating income is expected to grow 16% and the non-GAAP diluted earnings per share expected to grow 18%. So with that in mind, they're expecting the net income to probably grow about 16%.

[00:04:28]They're expecting the revenue to grow about 14% and they're expecting the buyback shares at about 2%. Overall, this looks like pretty strong guidance going forward. If we take a look here at the fullear 2026 segment revenue guidance, consumer raised growth to approximately 10%. This includes Turboax growth of approximately 7%. Credit Karma is expected to grow 19%. So Credit Karma looks like the stronger revenue segment for in it going forward which is interesting. In it announced guidance for the fourth quarter as well revenue growth of about 12%. So this is the thing that is interesting that they're expecting deceleration as we can see. So, the full year 2026, it grew faster last quarter.

[00:05:15]It grew, I think, 16 to 18%, but it's decelerating to 12%. Maybe that's the problem here, that it's decelerating compared to the past few quarters, as we can see here. Um, if we're expecting 14% revenue growth for 2026, but yet the past two quarters, this past quarter that they just reported and the upcoming quarter expected to grow only 11 to 12%.

[00:05:38]That is a little bit concerning in terms of the deceleration of the business. So maybe that's the reason why the stock's down so much even though they did raise guidance. So it's a little bit confusing on why the stock is down. If we take a look at forecaster, I just want to show you the PE ratio, the valuation metrics overlaid with the stock price. As we can see right now though, guys, look at how cheap this company's trading at a 24 PE ratio. In it has never traded at this low of a PE ratio since basically 2013.

[00:06:08]So this is one of the cheapest times to be buying this company. If we take a look at the fundamentals though, look at these fundamentals. They continue to grow very consistently. Quarterly numbers look pretty decent. But as we can see, we are expecting deceleration for these upcoming few quarters. So that is something to keep in mind if you want to invest in this company, which I'm not in love with that for this upcoming few quarters that it did decelerate. So that is something to maybe be a little bit concerned about. If we take a look at the net income though, net income is definitely growing faster. So, I think that's the other problem we had here. We wanted to see the net income grow even faster. What my thesis for this company is they're going to become more efficient in terms of the profitability.

[00:06:53]So, if when they come more efficient, the profit margin will continue to increase higher. But the problem here is that with that earnings, the operating income grew slower than the revenue. I think that's the main problem here in terms of this report. Even though they beat earnings estimates, that is the one thing that I'm a little bit worried about. Taking a look at the average shares outstanding, they're starting to buy back shares once again as the stock is falling. Um, this one the worst S&P 500 companies right now performance-wise. I think we're down about 50% and we're going to be down even more. If we go up to the stock price, guys, the past year we're down about 42% and the stock's down even more after hours. So that's something to keep in mind with this company going forward.

[00:07:39]It is one of the worst performing in the market. But I do want to talk about the moat around this business. A lot of people are worried about the moat, especially as AI can do taxes potentially for the future. One thing I have to say about that is personally I don't think that's going to happen because they're already partnering with all these AI companies. They're partnered with I think Gemini and Claude now. I'm not sure Gemini, but I know they're partnered with Claude right now in terms of like Anthropic.

[00:08:08]So that's something to keep in mind.

[00:08:10]Now, I think the reason that this is a good thing for this company is that these AI companies do not want to have anything to do with the legality issues going forward for their taxes. If you ask an AI to do your taxes, there can be mistakes. And if there is a mistake and say something happens, they can be sued for that. So, with Turboax and into it, they're going to want to be able that's the moat around this business. That's what I think the legality issues going forward and that's why I'm investing this company. It's not a big portion of my portfolio. If we take a look guys, the portion in my portfolio right now is literally 5%. It's nothing crazy in my portfolio. It's the second smallest position. I have four shares at $389.

[00:08:59]It's about $1,500 in this company. So, nothing crazy for the total value of my portfolio. I want to show you though my intrinsic value calculations going forward for into it. So if I press into put this into my intrinsic value calculator with valuation investing.money if you want to go check it out. It's only $5 per month and you can get a 7-day free trial. Links in the description as well. But if we take a look at these scenarios I'm going to input some assumptions going forward.

[00:09:29]I'm going to do 9 12 and then 15% growth rate. I expect this company to be growing that 11 12% growth area and I think this is fair for this company. For the profit margins, I'm going to ramp this up. A lot of analysts expect them to ramp up these profit margins and get more efficient, which makes sense. So, I'm going to do 23 28 33. And then for the future PE ratio, I'm going to do 18 here. Here, I'm going to do 23. And then for the bullish case, I'm going to do 28. And for the shares outstanding, I expect them to continue to buy back a little bit faster as the stock is more compressed. And as we saw with that recent earnings report, it appears that they are buying back a little bit faster. And if we take a look at the annual return from today, I get about an 18% return. And if we take a look at what the price is right now, um, right now I think we could probably make 20% return. If we put in our desired return of 20%. The price we would be wanting to pay is 354. Right now, the price is under that. So, I think if you bought today, you could potentially make 20 plus%. But you have to do your own due diligence on this company. There's definitely some concerns going forward.

[00:10:41]And I'm definitely considering maybe adding one share, but I definitely don't want to put a lot of money in this company cuz I do think that there's a lot more risks associated with this company compared to other positions in my portfolio. So, with that being said, thank you guys for watching this video on into it. Please subscribe, hit the like button, comment down below, and see