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Intuit Shares Decline After Hours on Weak Outlook; Fourth-Quarter Results Beat Views

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Intuit Shares Decline After Hours on Weak Outlook; Fourth-Quarter Results Beat Views

Intuit's (INTU) shares tumbled late Tuesday after the company issued a soft fiscal 2027 outlook, even as it reported higher-than-expected fourth-quarter results.

The tax and finance software maker expects full-year adjusted earnings of $22.88 to $23.12 per share. Analysts polled by FactSet expect $27.34. Revenue is pegged to grow 9% to 10%, at $23.28 billion to $23.51 billion for the fiscal year that began Aug. 1. The Street is looking for sales of $23.70 billion.

Shares of Intuit plunged 9.3% in after-hours trading, and had fallen 46% this year through Tuesday close.

For the fourth quarter ended July 31, Intuit's adjusted earnings rose to $4.03 per share from $2.75 in the prior-year period, compared with the $3.58 consensus view. Revenue climbed 14% annually to $4.35 billion, topping the average analyst estimate of $4.27 billion.

Revenue in the global business solutions segment advanced 14% to $3.4 billion, led by a 20% increase in QuickBooks online accounting sales, Intuit said.

The consumer division's revenue rose 14% to $930 million. Personal finance platform Credit Karma's revenue improved 16%, while tax-preparation software TurboTax sales increased 3%.

For the ongoing three-month period, the firm expects adjusted EPS between $2.44 and $2.48 on revenue growth of 11%. The market's forecast is for non-GAAP EPS of $4.04 and sales growth of 12%.

RBC Capital Markets said more than 80% of Intuit's revenue comes from recurring subscriptions, while the growing complexity of tax codes and regulations presents a tailwind for Intuit. In addition, generative artificial intelligence offers a major opportunity.

"More broadly, it is hard to see near-term catalysts for the stock despite management's constructive commitments on EPS and margin expansion," RBC said in a client note earlier in August. "We do not think margin expansion alone is enough for the stock to work; investors need top-line re-acceleration proof points to get constructive."

Tax services provider H&R Block (HRB) reported fiscal fourth-quarter results above consensus estimates on Aug. 11, and issued a strong fiscal 2027 guidance.

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