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Intuit's Q3 Surge: A Buy Signal for the Next Decade?

Wesley ParkFriday, May 23, 2025 10:24 pm ET

3min read

The markets are abuzz with Intuit's (NASDAQ: INTU) third-quarter results—15% revenue growth, a $7.8 billion haul, and a full-year guidance upgrade to 15%—marking the strongest organic growth in over a decade. This isn't just a quarter; it's a blueprint for dominance in financial software. Let's dig into why this is a buy now moment—and why analysts are sprinting to raise their price targets.

The Q3 Numbers: A Masterclass in Execution

Intuit didn't just beat estimates—they obliterated them. Every segment fired on all cylinders:
- TurboTax Live revenue soared 47%, blowing past the 15-20% long-term target.
- Credit Karma delivered 31% growth, proving its ad-driven model's staying power.
- QuickBooks Online Accounting jumped 21%, while Global Business Solutions (60% of revenue) surged 19%.

Even the “weaknesses” are manageable. A 1% decline in TurboTax online units? Balanced by TurboTax Live's 24% user growth and IRS data showing accelerating demand for assisted tax services. Mailchimp's flat growth? A rounding error compared to the $4 billion Consumer Group's 11% rise.

The AI Edge: Intuit's Secret Weapon

The real star here is AI, which CEO Sasan Goodarzi calls a “game-changer”. Why?
- TurboTax's AI now cuts tax prep time by 12%, with half of users finishing in under an hour.
- AI-driven Credit Karma ads are converting better, boosting revenue.
- GoCo's HR platform acquisition (coming soon) will supercharge SMB offerings, leveraging AI for payroll and benefits.

This isn't incremental improvement—it's a platform play. Intuit isn't just selling software; it's building mission-critical ecosystems that SMBs and consumers can't live without.

Analysts Are Raising the Bar—Fast

Goldman Sachs just hiked its price target to $750 (12% upside from current levels), while Stifel and Piper Sandler went even further, to $850 and $825, respectively. Why? Let's look at the math:

Revenue growth has accelerated from 13% in Q2 to 15% in Q3, with full-year guidance now at 15%.
Operating margins are exploding: GAAP operating income jumped to 35% growth, fueled by AI efficiency gains.
Free cash flow margins? Analysts see them hitting 35%+, turning Intuit into a cash-printing machine.

The key takeaway? This isn't a one-quarter wonder—it's sustainable, compounding growth.

The Bulls vs. the Bears: Why the Bulls Win

Bear argument #1: “TurboTax online is shrinking!”
- Counter: TurboTax Live's surge (47% revenue growth) and IRS data show assisted tax is the future. The DIY market is maturing, but Intuit is owning the shift to premium, AI-driven services.

Bear argument #2: “Mailchimp is stuck.”
- Counter: Mailchimp is a rounding error compared to QuickBooks and TurboTax. Intuit is doubling down on high-margin SMB tools, not email marketing.

Bear argument #3: “Economic downturns hurt software stocks.”
- Counter: Intuit's subscription model (75% of revenue recurring) is recession-proof. SMBs and consumers will always need tax prep and accounting tools.

The Bottom Line: This Is a Buy—Now

The numbers, the AI, the analyst upgrades—they all point to one thing: Intuit is firing on all cylinders. With a $187 billion market cap, it's no small player—but its growth rate (mid-teens revenue, 18%+ EPS) screams underappreciated upside.

Here's why you act now:
- The stock is up 8.5% premarket on the earnings—imagine if it hits consensus for Q4.
- The average analyst target is $731, but Goldman's $750 and Stifel's $850 suggest this is just the start.
- With $7.8 billion in cash, Intuit can buy its way into new markets (like GoCo's HR space) or buybacks.

This isn't a “maybe” stock—it's a must-own growth engine. If you're on the sidelines, you're missing the train. Buy Intuit now.

Action Alert: Intuit's Q3 wasn't just a win—it was a declaration of dominance. With AI turbocharging growth, subscriptions shielding it from downturns, and analysts in full upgrade mode, this is your moment. Don't let it slip away.

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