Intuit (INTU) could face near-term pressure from softer TurboTax growth and AI concerns, but stronger AI use, growth in assisted tax services, and a leaner cost structure should support the company over time, RBC Capital Markets said in a note emailed Thursday.
The investment firm said fiscal Q3 revenue, non-GAAP operating margin, and non-GAAP earnings per share came in above market estimates, with non-GAAP EPS at $12.80, as TurboTax was the main weak point, with revenue growth down to 7% and fiscal 2026 guidance for the business cut to about 7% from 8%.
The lower TurboTax outlook could keep investor concerns alive that AI tools may reduce demand for tax software in the near term; however, TurboTax Live remains a positive area, with customers and revenue expected to grow strongly as users seek more help and faster refund access, according to the note.
Intuit can still become a long-term AI winner, while growth in Credit Karma and ProTax and a 17% workforce reduction could help support future performance, RBC added.
RBC kept its outperform rating for Intuit, but cut its price target to $500 from $600.
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