Intuit Inc. (INTU)
Software / Fintech / IA
Global financial technology platform organized into four businesses of different nature —QuickBooks/Enterprise Suite, TurboTax, Credit Karma and professional tax software— valued as a sum of the parts: Very undervalued with an estimated return of +17% over 5 years.
- Price
- $359.25
- Intrinsic value (5y, base)
- $736
- Total annual return (5y)
- 17.0%
- Status (nominal)
- Very undervalued
- Margin of safety
- +42%
The essentials
- Consolidated revenue growing 15.1% TTM, with FY2026 guidance raised to +13-14% after a strong third quarter
- Four segments of different economics: Global Business Solutions (59% of revenue, ~76% margins), Consumer/TurboTax (26%), Credit Karma (12%, with strong operating leverage) and ProTax (3%)
- Return on invested capital of ~21%, well above the 10% bar, in a business with minimal maintenance capital
- Restructuring announced on 20-May-2026 (17% workforce reduction, $300-340M in charges) coincides with the stock trading 53% below its 52-week high despite raised guidance
Intrinsic value — two valuation methods
Total return at 5 years: 16.9%/year = 15.4% appreciation + 1.5% dividend. The target price ($736) is ex-dividend; the $37 in dividends collected over 5 years are added separately.
By both methods, the value today (DCF $621 · Multiples $623) exceeds the market price ($359).
Pillars of the analysis
The verdict — today vs 5 years
Today — with margin of safety: at $359 trades ~42.3% below its value discounted to today (~$623) — the wide discount we require (≥38%, equivalent to a ~15% annual return); the risk is covered by the margin, not the rate.
At 5 years — Muy infravalorado: the target price ($736) plus dividends yield above the required average return (10%) — the business compounds.
The bridge: the return at 5 years comfortably exceeds the risk-free rate (4.5%) — and the discount reaches the required margin of safety.
Thesis
The business
Four businesses of uneven quality under a single platform: Global Business Solutions and Consumer with segment operating margins of 76-78% before corporate costs, Credit Karma with strong operating leverage (margin nearly doubled in FY2025) and ProTax as a mature, stable business. Return on invested capital of 20.8% sits comfortably above the 10% bar, in a business with minimal capex (0.6% of TTM revenue).
The valuation
Valued as a sum of the parts: each segment with its own exit multiple (Global Business Solutions at 24x EV/NOPAT, TurboTax at 16x, Credit Karma at 20x, ProTax at 15x), weighted by the fraction of consolidated NOPAT it contributes in year 5. The resulting 5-year value implies a return of +17% against the market price.
The margin of safety
There is a margin of safety: the market's perception is meaningfully worse than reality. The current price of $336.44 trades 53% below the 52-week high, without public research having identified a single catalyst beyond the restructuring announcement of 20-May-2026 — which coincided with raised revenue and earnings-per-share guidance in the same release.
What to watch
The central disconfirmer is whether public competition in consumer tax (IRS Direct File) erodes the TurboTax business faster than the model assumes (7% growth guided for FY2026, decelerating to ~4.5% in year 5); and whether the 17% workforce reduction succeeds in accelerating execution without harming product quality or customer retention during tax season, which is where Intuit cannot afford a service disruption.
Educational / informational. Does not constitute investment advice.