Intuit Stock Drops Over 6% Despite Strong Earnings and AI-Driven Growth Forecast

Intuit Inc. (Nasdaq: INTU) has reported robust financial results for the fourth quarter and full year of fiscal 2025, ended July 31, showcasing strong growth across its business segments. The company achieved fourth-quarter revenue of $3.8 billion, marking a 20% year-over-year increase, while its full-year fiscal 2025 revenue grew by 16% to reach $18.8 billion. This performance was driven by substantial growth in areas such as TurboTax, Credit Karma, and QuickBooks Online, reflecting the successful integration of AI technologies across its platforms and the contribution of AI-enabled human expertise.

Sasan Goodarzi, Intuit's CEO, attributed this success to its innovative use of AI agents, emphasizing prospects for capturing greater market opportunities. On an operational level, Intuit reported an increase in GAAP operating income by 36% to $4.9 billion, with non-GAAP operating income up 18% to $7.6 billion. Furthermore, Intuit experienced rises in GAAP and non-GAAP earnings per share by 31% and 19%, reaching $13.67 and $20.15, respectively.

Credit Karma showcased exceptional performance, with Q4 revenue surging 34% to $649 million, stimulated by elevated demand for personal loans, credit cards, and auto insurance products. Meanwhile, TurboTax Live demonstrated significant traction, delivering a 47% rise in revenue for fiscal 2025, highlighting increased customer interest and adoption.

While Intuit surpassed Wall Street's estimates for Q4 with an EPS of $2.75, rising 38% year-over-year and beating the analyst forecast of $2.66, its outlook for fiscal 2026 indicates moderated revenue growth. The company foresees a fiscal 2026 revenue target ranging between $20.997 billion to $21.186 billion, representing a predicted growth rate of 12% to 13%, alongside an anticipated adjusted EPS increase between 14% and 15%, potentially reaching up to $23.18.

Global Business Solutions is projected to grow by 14% to 15%, driven by sustained expansion in core offerings excluding Mailchimp. Furthermore, Credit Karma revenue is expected to rise by 10% to 13%, with TurboTax expected to maintain an upward trajectory of over 8%.

In terms of capital allocation, Intuit announced a 15% increase in its quarterly dividend, establishing a payout of $1.20 per share on October 17, following a recent authorization by its board. Additionally, a new $3.2 billion stock repurchase plan was approved, enhancing Intuit's total repurchase capacity to $5.3 billion, marking a strategic commitment to returning value to shareholders.

Despite these positive financial results, Intuit's stock saw a decline of over 6% in after-hours trading, reflecting investor reactions to the projected slower revenue growth in fiscal 2026 compared to fiscal 2025.

Analysts remain optimistic about Intuit's stock, with a general consensus of a strong buy rating. The average stock price target indicates an upside potential of around 21.29% from current levels. While these estimations may be subject to revision following the fiscal 2025 earnings announcement, analyst forecasts underline anticipated growth driven by strategic innovation and capital deployment activities.

Looking ahead, Intuit anticipates revenue growth in the first quarter of fiscal 2026 in the range of 14% to 15%. The EPS is expected to align closely with analyst estimates between $3.05 and $3.12. Intuit continues to cultivate its strategic initiatives through AI advancements and segment consolidations, positioning itself for continued operational excellence in fiscal 2026 and beyond.