Intuit’s latest earnings report gave investors new evidence of the bullish case Morgan Stanley made ahead of the company’s fiscal third-quarter results, while leaving some of Wall Street’s biggest concerns around TurboTax and artificial intelligence unresolved.
The company reported tax third quarter revenue of $8.56 billion, up 10% from a year ago, while GAAP diluted earnings per share rose 11% to $11.09. Non-GAAP diluted earnings per share increased 10% to $12.80, while consumer revenue increased 8% and Global Business Solutions revenue increased 15%.
More intuition
Those results came after Morgan Stanley framed the quarter as a key test for Intuit. In a note given to TheStreet by Morgan Stanley, analyst Keith Weiss maintained an Overweight rating on Intuit, named it a Top Pick in Large-Cap Software and set a $580 price target for the stock. The note said the stock had fallen about 40% year-to-date prior to the report and was trading at 19 times calendar 2027 GAAP EPS, creating what Morgan Stanley saw as a favorable risk-reward setup.
Intuit raised its full-year fiscal 2026 revenue outlook to a range of $21.34 billion to $21.37 billion, representing growth of about 13% to 14%. It also raised its outlook for non-GAAP operating income and non-GAAP EPS, and the company now expects non-GAAP EPS of $23.80 to $23.85.
TurboTax still leads the debate
In the quarter, Intuit said consumer revenue rose to $5.3 billion, while TurboTax revenue grew 7% to $4.4 billion. Credit Karma’s revenue rose 15% to $631 million, driven by strength in personal loans, auto insurance and mortgage lending, while ProTax revenue was flat year-over-year.
The company’s full-year fiscal forecasts showed both strength and pressure on the business. Intuit expects TurboTax Live revenue to grow 36% to $2.8 billion and represent about 53% of TurboTax’s total revenue, and TurboTax Live customers are expected to grow 38%. At the same time, the company expects total TurboTax Online units to decline about 2%, TurboTax’s share of e-filing to decline about 1 point, and zero-paying customers to drop to about 7 million from 8 million last year.
The note said investors were concerned that lower-cost tax options and native AI participants could put pressure on TurboTax units and average revenue per customer, especially among simple DIY filers. Morgan Stanley argued that TurboTax still has advantages in terms of consumer confidence, prior year continuity, tax form importing, integrated filing workflows, refund visibility and access to expert help when returns become more complex.
