Intuit stock plunges after weak 2027 revenue outlook: Is it a buy?

Intuit shares fell about 11% in premarket trading on Wednesday after the enterprise software company on Tuesday issued a weaker-than-expected revenue outlook for fiscal 2027, warning that efforts to increase customer growth and market share will weigh on near-term sales.

The decline came despite Intuit beating Wall Street expectations for both fourth-quarter revenue and earnings.

The company forecast fiscal 2027 revenue of $23.28 billion to $23.51 billion, representing growth of 9% to 10%.

That would mark a slowdown from the 14% revenue growth recorded in fiscal 2026 and fall below analysts’ estimate of $23.72 billion, according to LSEG-compiled data.

Intuit attributed the slower outlook to weaker sales at Mailchimp, continued declines in its desktop products and lower average revenue per TurboTax customer following changes intended to attract more users.

"Looking ahead, we're focused on scaling our Big Bets, accelerating customer growth, and making deliberate choices to create a stronger foundation for durable long-term growth," CEO Sasan Goodarzi said.

For the fourth quarter, revenue increased 13.6% to $4.35 billion, beating the $4.27 billion expected by analysts.

Intuit expects fiscal 2027 adjusted earnings per share of $22.88 to $23.12, including a $5.81 impact from share-based compensation expense.

Analysts had been expecting $27.32.

The company also forecast first-quarter revenue of $4.29 billion to $4.31 billion, below the $4.36 billion analyst estimate.

Like many software companies, Intuit has come under pressure in recent months, with its shares falling from a record high of $812 in July last year to now trading at levels of $357.

The shares are down 43% this year.

The decline has been driven largely by investor concerns that the rise of AI-powered tools could disrupt the company’s business.

TurboTax strategy shifts toward customer growth

A key part of Intuit’s new strategy involves accepting lower revenue from individual TurboTax users in exchange for expanding its customer base.

The company said it lost “quality DIY customers to low-cost providers” during the latest tax season as consumers gained access to a growing number of cheaper alternatives.

“Price is now the number 1 reason customers leave TurboTax,” Goodarzi said on the company’s earnings call on Tuesday.

Historically, Intuit focused its TurboTax strategy on maximizing tax revenue and average revenue per customer by moving users toward higher-value products.

The company is now changing that approach, prioritizing customer acquisition and retention.

“This means we are deliberately accepting lower initial DIY tax ARPC to acquire and retain more quality customers, grow e-file share and create greater lifetime value,” Goodarzi said.

Chief Financial Officer Sandeep Aujla said the fiscal 2027 outlook reflects “deliberate actions” to improve the price-value equation for DIY customers, resulting in lower tax ARPC.

Intuit expects TurboTax revenue to grow only 2% to 3% in fiscal 2027, compared with 7% growth in fiscal 2026.

QuickBooks also moves toward lower prices

The company is applying a similar strategy to QuickBooks, where it is introducing free and lower-cost products to bring more small businesses into its ecosystem.

Intuit said QuickBooks Free and QuickBooks Lite are designed to widen the customer funnel, with the company expecting to monetize users through payments adoption and eventual upgrades to paid products.

QuickBooks Free had more than 20,000 customers either actively using the product or converting to paid offerings as of last month, according to Intuit.

The approach represents a broader shift from maximizing revenue from existing customers toward building a larger base that could generate greater lifetime value over time.

However, investors are being asked to accept slower near-term growth while Intuit tests whether the strategy can translate into stronger customer acquisition and retention.

Analysts split over Intuit’s prospects

Jefferies maintained a Buy rating and $500 price target, arguing that the conservative outlook creates a relatively low bar for Intuit to clear.

The firm noted that fiscal 2027 revenue growth of 9% to 10% would represent a decline of more than 400 basis points from fiscal 2026 and mark the first time since fiscal 2015 that Intuit's growth could fall below 10%.

Jefferies also pointed to the weakness in TurboTax guidance.

Its 2% to 3% growth forecast is below H&R Block’s 4.8% outlook, while TurboTax revenue has not grown below roughly 7% over the past 11 fiscal years.

Morgan Stanley took a more cautious stance, cutting its price target to $315 from $335 while retaining an Equalweight rating.

The firm said execution risk remains high until the company demonstrates that its pricing reset can successfully drive customer growth.

Morgan Stanley nevertheless noted that Intuit appears inexpensive at roughly 14 times calendar 2027 earnings.

Mizuho retained its Outperform rating and $430 price target.

AI remains a key part of the investment case

Intuit’s earnings also offered evidence that artificial intelligence is supporting rather than replacing parts of its business.

“The fourth quarter "backs up Intuit's argument that AI is expanding its ‌business ⁠rather than hollowing it out, yet the slower growth guide suggests the company itself isn't promising the acceleration continues at the same pace," said Gadjo Sevilla, analyst at Emarketer.

Intuit shares are now down about 43% this year, leaving investors to weigh the company’s lower valuation against the uncertainty surrounding its growth strategy.

The central question is whether accepting lower revenue per customer today can generate enough additional users, market share and lifetime value to restore growth over the longer term.