- B1 The core franchise is shrinking at the low end, conceded as a competitive loss, not a strategy. TurboTax units fell −2% to 39.0M in FY26; e-file share fell ~1 point, DIY share ~3 points (reported). In May 2024 yielding those filers was a choice — Goodarzi: “we are not interested in those customers” (May 23, 2024). By May 2026: “We lost on price” (May 20, 2026), price the #1 churn reason. If the leak is channel, not price, the shipped fix — free Credit Karma Tax wedge plus value pricing — does not fix it.
- B2 The guidance system is asymmetric, and the asymmetry is now a lawsuit. Guides are sandbagged where safe (Credit Karma FY25 guided +5–8%, delivered +32%) while the thesis-critical TurboTax FY26 guide (+8%) was reiterated twice mid-season (Nov 20, 2025; Feb 26, 2026) and trimmed only with the results (May 20, 2026). Two securities class actions allege that guide was unreliable — Baldwin, No. 3:26-cv-07086, and Bruce, No. 5:26-cv-08518 (N.D. Cal., Jul 10 and Aug 17, 2026). Allegations unproven; the desk’s transcript record matches their timeline. B3 follows: the FY27 guides cannot be taken at face value in either direction — a “deliberately low bar” confesses the guide is not a forecast.
- B4 Mailchimp is a $12B asset guided to shrink. Bought Sep 2021 at ~15× sales; FY26 revenue ~$1,267M (derived, not filed), FY27 guided −1% to 0%. The double-digit-exit promise of Aug 2025 was walked back across three calls to “sometime beyond fiscal 2026” (Aujla, Feb 26, 2026), then missed.
- B5 Insiders’ own money disagrees with the “dislocated stock” rhetoric. Across Oct 2024–Oct 2026 the four named insiders sold ~$804M (Goodarzi $137.8M, Cook $627.6M, Aujla $21.2M, Balazs $17.7M) with zero open-market purchases — and the Oct 16 sweep extends the zero through the Oct 1, 2026 vesting at $275.71.
- B6 The rally spent most of the cushion, and the substitute template exists. At $307.14 (Oct 13) the parts summed +12.5% above price; at $330.17 the slack is +4.6%, the mid-stress case −41% below price. april and Column Tax hold the e-file authorizations a front-end would need; the labs chose partnership over building that stack — a reversible choice, and Intuit pays OpenAI $100M+/yr for rented distribution.
Deep Dive · NASDAQ · INTU · October 16, 2026 · Watchlist research
Intuit NASDAQ: INTU
Deep Dive · October 16, 2026
Evidence base: 13 consecutive earnings calls read in full (FY2023Q4–FY2026Q4), the FY2026 10-K, the latest proxy, a Form 4 sweep to Oct 16, 2026, court dockets. No consensus estimates are used anywhere on this page.
$330.17
+6.36% on the day · −52.1% from the 52-week high
Yahoo Finance chart API, pulled Oct 16, 2026
Yahoo Finance chart API, pulled Oct 16, 2026
17.7%
of the way from the 52-week low to the high — the rally has already spent most of the sum-of-the-parts cushion (Reverse discounted cash flow (DCF), below)
Verdict
- QualityA ~100M-customer financial operating system compounding revenue +13.9%/yr for four years at ~81% gross margins, on a fortress balance sheet. Quality is not the debate.
- MoatA guarantee-and-authorization moat wrapped around rented interfaces — durable where filing liability is the product, already gone at the DIY (do-it-yourself) low end. That is the debate.
- PriceNormalized base: operating cash flow $7,522.5M − capex $129.5M − stock-based compensation $2,012M = owner earnings $5,381M → +5.6%/yr — the decade of owner-earnings compounding $330.17 requires, against +28.5%/yr delivered FY22→FY26 on a tax-flattered base. CAP (competitive advantage period): 3.7 years at +10% growth.
- Net debtNet debt $469M on the desk bridge, $221M counting long-term investments.
- Management · B−An elite consolidated guidance record over an asymmetric segment-guide system; candor cut on disclosure that arrived with the results.
- Top unverifiableMailchimp’s standalone economics — FY26 revenue ~$1,267M is derived from guidance, never filed; operating income undisclosed in every period.
- How to read this page(1) what the price requires → (2) what the record supports → (3) what would change the read. No consensus estimates are used; the variant view is the bar-vs-record gap, stated numerically.
The bar is +5.6%/yr; the record is +28.5%/yr — with an asterisk on the record, not the bar.
The bar is +5.6%/yr; the record is +28.5%/yr — with an asterisk on the record, not the bar.
The price requires a decade of +5.6%/yr owner-earnings growth (normalized base; +2.7%/yr reported). Intuit delivered +28.5%/yr FY22→FY26 — but FY26 cash flow was flattered by a +$1,714M deferred-income-tax swing (Corrections), and the core shrank while it compounded (units −2%). Land the guided FY27 year and the nine years behind the May 2027 gate need only +3.7%/yr — 87.3% of the price sits behind the gate, not in it. Base rate: roughly half of large, profitable firms sustain ~5%/yr free-cash-flow growth for a decade; ~1 in 10 sustain 10%+.
Key debates
Six debates · each with a resolving event| # | Debate | Bull read | Bear read | Resolves |
|---|---|---|---|---|
| 1 | The DIY low end: pricing problem or channel break? | Price was conceded; the fix is shipped — free Credit Karma Tax wedge, value pricing, AI-native DIY | Filers left for agent surfaces; a free product does not fix a distribution loss | May 2027 gate — units & share thresholds below |
| 2 | The FY27 guide: floor or forecast? | Floors by construction — 13 of 13 quarterly EPS (earnings per share) beats, three straight years beaten above the range | The same system sandbagged Credit Karma ~24 points and missed TurboTax adversely | Nov 19, 2026; Feb 2027 (guide held or trimmed) |
| 3 | Assisted tax: moat or mix shift? | Live +37% to 53% of TurboTax revenue — the agent era routes to Intuit | Mix conversion inside a shrinking DIY pool, with an ARPC (average revenue per customer) ceiling | May 2027 gate — Live vs mid-teens guide, share past 53% |
| 4 | Mailchimp: contained error or a pattern? | Now its own segment, guided flat, exposure visible; GBS (Global Business Solutions) ex-Mailchimp +18% | $12B at 15× sales; ~$9.8B of goodwill un-impaired only because the test runs inside a larger unit | Nov 19, 2026 — first segment print vs the derived base |
| 5 | Has capital allocation turned? | FY26 retired 13.366M shares for $5,463M at $408.72; count fell for the first time; $7.9B remains — and $330 retires ~24% more shares per dollar | FY24–25 bought at ~$577–647; insiders sold ~$804M, bought $0 | Each 10-Q: pace at ~$330 and the count |
| 6 | Partner distribution: rented reach or rented moat? | Inside ChatGPT, Claude, Muse, Perplexity on contractual terms — no revenue share, data inside Intuit’s walls | Pays $100M+/yr for rented distribution; a lab can pair with a licensed e-file engine (april, Column Tax) | Event-driven: any lab pairing with a non-Intuit engine |
🐻 The core franchise is shrinking at the low end, conceded as a competitive loss, not a strategy
Numbered · the bull answers by number🐂 The remaining case is the bar (+5.6%/yr vs +13.9%/yr delivered revenue compounding)
Concessions kept, not smoothed- → B1 Concede the loss; contest the extrapolation. The leak is the low end only. The assisted leg — the one the disruption thesis said agents would take — compounds inside Intuit: Live +37% to 53% of TurboTax revenue, >75% of additions in-house DIY upgrades (Investor Day, reported). The fix is shipped; the gate thresholds below grade it.
- → B2/B3 Concede the cuts — Guidance B, Candor C+ — and keep the distinction. The consolidated record remains the page’s strongest forecasting evidence: full-year guides beaten above the range three straight years, quarterly EPS guides 13 of 13. The asymmetry convicts the segment guides and the trajectory narrative, not the annual P&L guide. The valuation doesn’t lean on the guide either way: the two-stage math fixes only the guided year and solves the rest — land FY27 and the post-gate bar is +3.7%/yr (normalized), barely moving with stage 1 (±1 pt → ≤0.3 pts).
- → B4 Concede in full — it is why Capital Allocation grades C+. But size it: zeroing Mailchimp entirely costs $11.03/share (3.3% of price) (decomposition below). A real error, bounded — not the thesis.
- → B5 Concede the signal; record the mitigants. Sales were plan-footnoted, at the highs, none during the collapse (last: Goodarzi, Jan 7, 2026, at $650); Cook, 73, still holds 6,162,547 shares. Zero buys caps Alignment at C+ — it does not break the business case, and the company’s FY26 buying was the counter-cyclical act insiders skipped.
- → B6 Concede the thinner cushion; the case was never the discount. The remaining case is the bar (+5.6%/yr vs +13.9%/yr delivered revenue compounding). The pairing risk has not happened: on every partner surface the partner does estimates, document gathering and expert booking — preparation and e-filing stay inside TurboTax, because no lab is an IRS-authorized e-file provider and Intuit is. Terms are contractual: “There’s no revenue share” (Goodarzi, Nov 20, 2025); “the data does not leave our four walls” (Feb 26, 2026).
The moat is the guarantee, the data, and the filing authorization — the interface is rented
Fiscal 2026 · ended Jul 31, 2026Intuit is the financial operating system for ~100 million consumers and small/midsize businesses: Global Business Solutions (FY26 $12,864M, 60% of revenue) is QuickBooks — online accounting, online services, the melting desktop ecosystem, and Mailchimp (~$1,267M, derived) through FY26 — and Consumer (FY26 $8,584M) is TurboTax, Credit Karma and ProTax.
The thesis in one line: the moat is the guarantee, the data, and the filing authorization — the interface is rented. An agent can draft, but Intuit stands behind the return (accuracy and maximum-refund guarantees attach to returns filed through TurboTax), holds data on ~100M customers, and is the authorized e-file transmitter the labs are not. What broke in FY26 is narrower than “disruption”: the DIY low end, where the moat was habit and price.
The governing frame: the fiscal Q3 FY27 print in late May 2027 is a regime gate — it can convert INTU back into a multi-year compounder — not a dated binary. (Headline quarter, Q4 FY26 vs Q4 FY25: revenue $4,354M, +13.6%; non-GAAP EPS $4.03 vs $2.75, +47%, old basis. Goodarzi, Q&A, Aug 25, 2026: “hold myself accountable for the lack of performance,” scoped to DIY and the low end.)
Actual compounding, FY22→FY26: revenue +13.9%/yr · net income +21.9%/yr · owner earnings +28.5%/yr
FY ends Jul 31 · $MFive fiscal years + TTM. Fiscal year ends Jul 31; TTM = FY2026 (Q1 FY27 unreported — it prints Nov 19, 2026). Source: FY2026 10-K (filed Sep 9, 2026). Full series, clustered ($M):
Profitability
| Line | FY22 | FY23 | FY24 | FY25 | FY26 / TTM |
|---|---|---|---|---|---|
| Revenue | 12,726 | 14,368 | 16,285 | 18,831 | 21,448 |
| GAAP operating income | 2,571 | 3,141 | 3,630 | 4,923 | 5,884 |
| GAAP net income | 2,066 | 2,384 | 2,963 | 3,869 | 4,566 |
Cash
| Line | FY22 | FY23 | FY24 | FY25 | FY26 / TTM |
|---|---|---|---|---|---|
| Operating cash flow | 3,889 | 5,046 | 4,884 | 6,207 | 8,838 |
| Capex (property & equipment) | 157 | 210 | 191 | 84 | 175 |
| Free cash flow (OCF − capex) | 3,732 | 4,836 | 4,693 | 6,123 | 8,663 |
| Stock-based compensation | 1,308 | 1,712 | 1,940 | 1,968 | 2,056 |
| Owner earnings (FCF − SBC) | 2,424 | 3,124 | 2,753 | 4,155 | 6,607 |
Capital return
| Line | FY22 | FY23 | FY24 | FY25 | FY26 / TTM |
|---|---|---|---|---|---|
| Diluted weighted-average shares (M) | 284 | 283 | 284 | 283 | 277 |
| Share repurchases (cash paid) | 1,861 | 1,967 | 1,988 | 2,772 | 5,412 |
Margin defense: the 27.4% operating margin (20.2% in FY22) rests on cost discipline and mix — SBC down 11.9% → 9.6% of revenue.
Segments and products (recast; FY26 YoY): GBS $12,864M (+16%) — Online Ecosystem $9,918M (+20%), Online Accounting $5,051M (+23%), Desktop $2,946M (+6%). Consumer $8,584M (+11%) — TurboTax $5,296M (+7%), Credit Karma $2,641M (+20%), ProTax $647M (+4%). Mailchimp ≈ $1,267M, derived (Gaps). Concentration, sized: Consumer is 40.0% of revenue and the fiscal Q3 tax quarter carries ~40% of the year’s revenue — one season is the model’s largest exposure.
Actual compounding, FY22→FY26: revenue +13.9%/yr · net income +21.9%/yr · owner earnings +28.5%/yr. Caveat on the last: FY26 operating cash flow rose +42% YoY, supplied mainly by a deferred-income-tax swing (+$1,714M, 65% of the rise), not working capital (+$202M) — a tax-timing add-back of unproven recurrence that flatters any trailing CAGR (Corrections).
Driver decomposition — what the thesis actually turns on
One contested driver| Driver | Status | Evidence |
|---|---|---|
| TurboTax low-end retention (units × DIY ARPC) | CONTESTED — the deciding driver | Units −2% to 39.0M; e-file share −1 pt, DIY share ~−3 pts (reported); the fix is shipped, unproven at scale |
| Assisted tax — TurboTax Live penetration | Settled by the record | Revenue +37% to 53% of TurboTax revenue; >75% of additions in-house DIY upgrades; guided mid-teens FY27 (Aujla, call) |
| Credit Karma funnel & consumer credit | Settled by the record | Filers starting in Credit Karma +54%; FY26 +20% vs a +10–13% guide |
| GBS Online Ecosystem & mid-market | Settled by the record | Online Ecosystem +20%; mid-market ~+40% for eight straight quarters |
The quarterly guide is a floor by construction, not a forecast
13 calls · FY2023Q4–FY2026Q4FY27 guide (set Aug 25, 2026; reaffirmed at Investor Day, Sep 17, 2026 — Tier 1): revenue $23,279–23,512M (+9–10%); GBS +13–14%; Consumer +4–6% (TurboTax +2–3%, Credit Karma +11–13%, ProTax +2%); Mailchimp −1% to 0%; TurboTax Live guided to mid-teens growth (Aujla, Q4 FY26 call — call guidance, not in the filed release table); non-GAAP EPS $22.88–23.12.
Basis break, flagged: from Q1 FY27, non-GAAP EPS no longer excludes SBC — the guide carries a $5.81/share SBC drag ($2.02B guided SBC), and its “+23–24%” is measured against a restated SBC-inclusive base, not FY26’s $24.27 print. Standing commitments: SBC gliding to 8% of revenue by FY2030 (9% by FY2028; the FY27 guide’s $2.02B ≈ 8.6% of guided revenue — ahead of the marker); EPS growth of at least high-teens on the new basis (restated Aug 25, 2026); long-term CAGRs cut Aug 25, 2026 to GBS 10–15% and Consumer 4–8%.
The delivery record (13 calls, FY2023Q4–FY2026Q4)
Initial full-year revenue and EPS guides were beaten above the top of the range three straight years (FY24: $16,285M and $16.94 vs guides of $15.890–16.105B and $16.17–16.47; FY25: $18,831M and $20.15; FY26: $21,448M and $24.27). Quarterly EPS guides beaten 13 of 13. The quarterly guide is a floor by construction, not a forecast.
The asymmetry (the scoreboard’s verdict)
The consolidated record is elite because large segment errors offset. Credit Karma: guided +5–8% for FY25, delivered +32%; guided +10–13% for FY26, delivered +20%. TurboTax — the line the thesis turns on — was guided +8%, reiterated twice, delivered +7%, the cause disclosed only at the end. The FY27 guide inherits both grades.
Investor Day (Sep 17, 2026) scored
Tier 1 reaffirmation — the Aug 25 targets left standing; the admissions (new-customer growth missed, price the #1 churn reason) are corroborated by delivery (units −2%; online paying customers +3%, decelerating from +5%). The promised response (AI-native DIY; Credit Karma Tax as the free wedge) is scored promised, first check Nov 19, 2026.
The residual risk is a pairing — an agent front-end with someone else’s licensed engine
Releases + the callsEvery frontier-lab surface, from releases and the calls. OpenAI (announced Nov 18, 2025; apps live Feb 5, 2026): TurboTax, QuickBooks, Credit Karma and Mailchimp apps inside ChatGPT, frontier models inside GenOS — $100M+/yr, multi-year, Intuit pays OpenAI (release); no revenue share, data stays inside Intuit (Goodarzi, Nov 20, 2025). Anthropic (Feb 24, 2026): MCP integrations across all products, Claude Agent SDK embedded — terms undisclosed; data and domain models stay inside Intuit, “the data does not leave our four walls” (Goodarzi, Feb 26, 2026). Meta (Muse) (live Sep 29, 2026): a QuickBooks-only connector. Perplexity (connectors Aug 31, 2026): QuickBooks + Mailchimp connectors — partner and would-be substitute at once (its consumer tax product, Apr 2026, drafts returns against TurboTax).
What the surfaces do is the moat in miniature: estimates, refund projections, document checklists, expert booking — then the filing hands back to TurboTax. No lab is an IRS-authorized e-file provider; the authorized-engine startups (april, Column Tax) prove the gate is crossable but hold no consumer distribution. The residual risk is a pairing — an agent front-end with someone else’s licensed engine.
Fortress — the easiest pass on the desk’s health check
Jul 31, 2026 · FY2026 10-K · Verdict: fortressLiquidity: cash $4,705M + current investments $2,495M = $7,200M (the company’s “$7.2B”); long-term investments add $248M (counting them, EV would be $88,454M — no bar moves >~0.05 pts). Total debt carrying value $7,669M (principal $7,720M) → net debt $469M on the desk bridge, $221M counting long-term investments. Customer funds receivable/payable ($5,038M) are exactly offset — excluded from the bridge.
Every debt tranche (principal): $750M 5.250% Sep 2026 · $500M 1.350% Jul 2027 · $750M 5.125% Sep 2028 · $500M 1.650% Jul 2030 · $750M 4.950% Jun 2031 (new Jun 2026) · $1,250M 5.200% Sep 2033 · $1,000M 5.500% Jun 2036 (new Jun 2026) · $1,250M 5.500% Sep 2053 = $6,750M senior unsecured, plus $970M of secured, non-recourse SPV facilities financing QuickBooks Capital loans (inside the bridge). The $2.2B revolver (to Jan 2031) and $2.2B commercial-paper program are undrawn. Covenants: compliant.
Post-period: in Aug 2026 Intuit repaid the $750M Sep 2026 notes from the June issuance — pro-forma principal debt $6,970M; the only remaining FY27 maturity is the $500M Jul 2027 notes. The $1.38/share quarterly dividend (~$369M) is payable Oct 16, 2026.
The caveat is intangibles, not solvency: goodwill $13,981M (GBS $9,821M — mostly Mailchimp; Consumer $4,160M — mostly Credit Karma) plus $4,642M of acquired intangibles against $18,992M of equity → tangible book ≈ $369M. Book value carries no downside information here; the strength is $6.6B of owner earnings against ~$0.2–0.5B of net debt. In a disruption scenario the risk is a goodwill impairment — a value event, not a solvency event. Verdict: fortress, the easiest pass on the desk’s health check.
The arithmetic asks little; the franchise question asks everything
House stack · 10% hurdleHouse stack: 10% required return, 10-year window, 2% terminal growth, terminal returns fading to the cost of capital, no exit multiple, solved on EV of $88,702M. Base = owner earnings (operating cash flow − capex − stock-based compensation, SBC charged in full).
Bases and bars
All rates are owner-earnings growth over 10 years; credited bars are required total growth at the demonstrated shrink — desk convention; per-share equivalents in the memo line.
| Base (exact definition) | Base $M | Flat-count bar | Credited bar (total) | CAP @ +8% / +10% / +12% | TV % of EV | Implied terminal EV/EBIT |
|---|---|---|---|---|---|---|
| Owner earnings, normalized (FY25–FY26 average OCF − capex − SBC) | 5,381 | +5.6%/yr | +3.3%/yr | 5.2 / 3.7 / 2.9 yrs | 51.3% | 11.7× |
| Owner earnings, reported (FY26 OCF − capex − SBC) | 6,607 | +2.7%/yr | +0.5%/yr | 0.9 / 0.7 / 0.5 yrs | 47.9% | 14.3× |
| Raw FY26 free cash flow, SBC not subtracted (memo only — do not use) | 8,663 | −1.1%/yr | — | — | — | — |
Memo — the same credited paths per-share: +7.9%/yr (normalized), +4.9%/yr (reported). The identity: (1 + per-share bar) × (1 − 2.12% shrink) = (1 + flat bar). This page prints the total-growth form, as every desk dive now does (Corrections).
Terminal diagnostics are sane on the normalized base (TV 51.3% of EV; terminal EV/EBIT 11.7×, inside the mature 8–14× range) and at the top of it on the reported base (14.3×). Alternatives travel with the headline: the reported base (+2.7%) is the no-normalization alternative; hurdle sensitivity moves the normalized bar from +1.6% (8% hurdle) to +9.1% (12%), the reported bar from −1.1% to +6.1%. One exposure, in dollars: if none of FY26’s +$1,714M incremental deferred-tax add-back recurs, the normalized base carries ~half (~$0.86B) and the true bar exceeds +5.6%; the add-back’s cause is not itemized in the filed record, and its recurrence is unproven.
Buyback credit: earned, shown beside the flat bar, never instead of it. Diluted weighted-average shares fell 283M → 277M (−2.12%/yr) on 13.366M shares retired for $5,463M (equity statement; $408.72 average); cash paid was $5,412M, the $51M gap being settlement and excise-tax payables (Corrections). $7.9B of authorization remains. Caveat: the pace was set buying a falling stock, and a forward pace is management’s choice, not a contract.
Decomposition cross-check (labeled — a decomposition of the inversion, not a competing valuation). Summing the units at unchanged Oct 13 multiples on fully-loaded operating income (GBS ex-Mailchimp 16×, Credit Karma 13×, TurboTax 10×, ProTax 11×, Mailchimp 7×) gives $345.40/share — only +4.6% above price (was +12.5%). Zeroing TurboTax + Mailchimp: $275.22/share clean (−16.6%), $193.50 half-stranded (−41.4%), $111.79 fully stranded (−66.1%). Inverted, the market pays $14,685M for the pair = 7.3× their loaded operating income = 78% of base-case value — re-priced from “nearly written off” to “discounted but alive.” Plausibility verdict: the arithmetic asks little; the franchise question asks everything — the price’s real content is a judgment that the low-end erosion is a contained pricing problem, not the first inning of disintermediation.
The price is a post-gate price: on the normalized base, 87.3% of EV sits in cash flows after FY28
Two-stage · stage 1 = FY27Stage 1 fixes model year 1 (FY27) at +19% total owner-earnings growth — a stated, crude translation of the +23–24% SBC-inclusive EPS guide (±1 pt moves the answer ≤0.3 pts). Stage 2 solves the constant growth the post-gate years (2–10) must then deliver:
Post-gate bars: +3.7%/yr (normalized), +0.3%/yr (reported) — with present value through FY28 at just 12.7% / 15.4% of EV. The price is a post-gate price: on the normalized base, 87.3% of EV sits in cash flows after FY28.
Breakeven grid (normalized base) — present value of each path as % of EV; ✓ = the combination justifies $330.17
| FY27 delivered ↓ / Post-gate growth → | 0%/yr | +2%/yr | +3.7%/yr | +5%/yr | +7%/yr |
|---|---|---|---|---|---|
| +8% (guide missed badly) | 72.5 | 81.9 | 91.0 | 98.7 | 112.0 ✓ |
| +12% | 75.1 | 84.9 | 94.4 | 102.4 ✓ | 116.1 ✓ |
| +19% (the guided year) | 79.8 | 90.2 | 100.3 ✓ | 108.8 ✓ | 123.4 ✓ |
Required post-gate bars by stage 1: +8% → +5.21%/yr · +12% → +4.63% · +18% → +3.79% · +19% → +3.66% · +20% → +3.52% · +24% → +3.00%. The grid’s shape: even a badly missed gate year (+8%) is recoverable at +5.2%/yr post-gate. What is not recoverable is a post-gate franchise that shrinks: at 0% post-gate growth no stage-1 outcome reaches 84% of EV.
The turbo trigger — the one driver that decides: TurboTax low-end retention. The other candidates are dismissed on arithmetic, not preference: Mailchimp zeroed moves value by $11.03/share (3.3% of price); the SBC glide, even failed outright, is a ~1.6%-of-revenue item by FY30 — against ~25 points of EV (post-gate ±2 pts = 88.4% ↔ 113.3% of EV). Retention is the only variable whose realistic range spans the breakeven.
Overall B− holds — at the low end of the band
Re-verified Oct 16, 2026 · Two sub-grades cutRe-verified against the completed 13-call series, a Form 4 sweep dated Oct 16, 2026 (through Oct 15; extended: zero filings of any form are dated Oct 16, 2026), the latest proxy (DEF 14A, Nov 26, 2025), and the FY26 10-K.
| Area | Grade | Change on re-verification |
|---|---|---|
| Capital allocation | C+ | Holds — no new evidence since the 10-K |
| Guidance credibility | B ▼ cut from B+ | Consolidated guide elite; the segment-guide system behind it is asymmetric |
| Execution / strategy | B+ | Holds — Live to 53% of TurboTax, Credit Karma engine, Big Bets 30% at +34% |
| Candor / transparency | C+ ▼ cut from B− | The low-end loss was narrated as strategy while it happened, disclosed by detonation |
| Alignment / comp | C+ | Holds — zero open-market buys through Oct 2026; Chair+CEO combined Jan 22, 2026 |
Overall B− holds — at the low end of the band. One more adverse proof point (a missed FY27 guide, another failed mid-season reaffirmation) tips it to C+.
The people
Goodarzi (CEO since Jan 1, 2019; Chairman + CEO since Jan 22, 2026) ran TurboTax, then Small Business, before the top job; Aujla (CFO since Aug 1, 2023); Balazs (CTO since Sep 2023; joined 1999, built GenOS); founder Scott Cook remains an employee holding 6,162,547 shares (2.21%).
The record the grade rests on
Revenue compounded +17.9%/yr FY19→FY26 ($6.78B → $21.45B); the annual guide beaten above the range three straight years. Against that: Mailchimp ($12B at 15× sales, Sep 2021) guided flat — the tenure’s defining capital error — while Credit Karma ($7.1B, 2020) earned its price back ($2,641M, +20%). Buybacks were procyclical for years (FY24 ~$577, FY25 ~$647), aggressive only after the collapse (FY26: 13.366M shares, $5,463M, $408.72). FY25 CEO pay $36.85M (ratio 152:1); the structure is performance-heavy (PSUs pure relative TSR, target at the 60th percentile), but Goodarzi owns only 52,545 shares outright of 284,112 beneficial, and the FY25 bonus was cut below formula (117.8% → 100%).
The re-verification’s new evidence, plainly
(1) The Form 4 re-run found only mechanical filings — RSU releases and tax withholding plus one director’s $92.7K pre-planned sale; the ~$804M-sold / zero-bought record stands, extended through the $275.71 vesting. (2) No 8-K since Aug 25, 2026. (3) The calls changed the grade anyway: a system reliable only in aggregate — ~24-point conservative segment errors offsetting an adverse miss on the load-bearing line — is not a B+ system, and disclosure that arrives with the results is not B− candor.
Legal overhang (Tier 1 — RECAP + the FY26 10-K; allegations unproven)
Baldwin v. Intuit Inc., No. 3:26-cv-07086 (N.D. Cal., filed Jul 10, 2026): §§10(b)/20(a) claims, alleged class period Aug 22, 2025–May 20, 2026 — that the FY26 TurboTax +8% guidance was unreliable while TurboTax was losing business to pricing pressure, revealed May 20, 2026 (−20% the next day). Bruce v. Intuit Inc., No. 5:26-cv-08518 (N.D. Cal., filed Aug 17, 2026): a wider period (Feb 25, 2025–Jun 1, 2026) adding Mailchimp and generative-AI statements. Status: the Sep 8, 2026 lead-plaintiff deadline passed with competing motions filed; no lead plaintiff appointed, no consolidation order indexed; the 10-K states Intuit believes it has strong defenses and cannot estimate a possible loss. Established: the suits and the guide’s timeline. Alleged, unruled: falsity, knowledge, loss causation.
Accuracy and liability are the product
Each item marked answered, thin, or unanswered| # | Fisher item | Mark | Evidence |
|---|---|---|---|
| 1 | Multi-year runway & successor products | Answered | Big Bets 30% of revenue at +34% — the successor engines are already the growth |
| 2 | Innovation productivity | Thin | GenOS and partner surfaces shipped in months; the 90%/80% capability figures are company-asserted, no independent benchmark (Gaps) |
| 3 | Go-to-market quality | Answered | Credit Karma funnel (starts +54%); inside ChatGPT, Claude, Muse and Perplexity at once |
| 4 | Margin level & its defense | Answered | 27.4% operating margin, from 20.2% over five years; defense = SBC glide + workforce reset |
| 5 | People | Answered | Internal succession throughout; one bench debit — Chriss to PayPal, 2023 |
| 6 | Industry-peculiar edge | Answered | E-file authorization, filing guarantees, ~100M-customer data, contractual partner terms |
| 7 | Horizon & dilution economics | Answered | Count fell for the first time (−2.12%/yr); SBC 9.6% → 8% by FY2030 on a dated path |
| 8 | Integrity — the capstone gate | Flagged | Candor C+: the low-end loss was narrated as strategy while it happened. Gate condition: any repeat of reaffirm-then-trim on a load-bearing guide fails this item outright |
| — | Mailchimp’s standalone economics | Unanswered | Revenue ~$1,267M derived, never filed; operating income undisclosed in every period. Routes to the Downside Checklist; first check Nov 19 |
What is durable: the trust layer — guarantees that attach to the filed return (accuracy, maximum-refund and audit-support guarantees, expert-signed accountability), which an agent front-end cannot self-supply; the IRS e-file authorization and its compliance stack; proprietary data across ~100M customers; the Credit Karma↔TurboTax funnel (starts +54%); QuickBooks’ embedded position in small-business money movement (payments volume +32% in Q4; Capital loan volume +54% to $1.9B in FY26); distribution breadth on economics-keeping terms.
What is not durable: the DIY low-end price umbrella (already gone — price is the #1 churn reason); interface ownership (rented, $100M+/yr to one landlord alone); Mailchimp’s category position (commoditizing, guided flat).
The honest moat statement: a regulatory-and-trust moat wrapped around other people’s interfaces — stronger than the SaaSpocalypse pricing assumed, because the partners came to Intuit: accuracy and liability are the product. But it converts the moat question into a contract-renewal question over a decade, which is what the May 2027 gate begins to answer.
Charts
Qualtrim dark exports · Oct 2026Charts are Qualtrim dark exports, Oct 2026.
No veto — two flags are the thesis itself, priced through the gate checkpoints, not around them
Pabrai’s five categories · Verdict: no vetoPabrai’s five published categories, applied as a closing veto gate. Verdict: no veto — two flags are the thesis itself, priced through the gate checkpoints, not around them.
- ▸Valuation: PASS — the bar (+5.6%/yr) sits below delivered growth on every window. FLAG — thin cushion (slack +4.6%; 87.3% of EV after FY28); $13,981M of goodwill against ~$369M of tangible book makes an impairment a live value event. FLAG — Credit Karma’s revenue is consumer-credit-cyclical; a downturn hits the funnel driver and the Consumer guide together.
- ▸Leverage: PASS — net debt $221–469M against $6,607M of owner earnings; maturities termed out to 2053, revolver and CP program undrawn.
- ▸Management & ownership: FLAG — zero open-market insider buys through a −52% drawdown. FLAG — the segment-guide asymmetry is under securities suit (allegations unproven).
- ▸Moat: FLAG — Mailchimp’s standalone economics unverifiable inside ~$9.8B of GBS goodwill. FLAG — the low-end umbrella is already lost (units −2%, share −1 pt): buying the leader whose moat is being routed around is the Dexter Shoes error, and Debate #1 is that question. PASS — partner terms contractual and corroborated.
- ▸Personal bias: FLAG — anchoring: $330 feels cheap against a $689 high, and the “low bar” framing is seductive precisely because of it. PASS — the gate is priced as a regime gate with post-gate tenor, not a binary bet.
Catalyst calendar & checkpoints — what the prints will test
Falsifiers, not vibes| Date | Event | Debate it moves | Threshold |
|---|---|---|---|
| Thu Nov 19, 2026 | Q1 FY27 print | #2, #4 | Revenue ≥ $4,294M and EPS ≥ $2.44 = guide delivered; below either breaks the beat chain |
| Late Nov 2026 | FY27 proxy (DEF 14A) | #5 | FY26 CEO pay; say-on-pay signal |
| Feb 2027 | Q2 FY27 print (mid-season) | #1, #2 | TurboTax guide held at +2–3% and low-end trends disclosed in-season = pass; a trim, or silence on the low end, = fail |
| Late May 2027 | Q3 FY27 print — THE REGIME GATE | #1, #3, #5 | The five numeric tests below |
Nov 19, 2026 — detail
(1) Revenue and SBC-inclusive EPS vs guide — the 13-for-13 chain restarts on the new basis. (2) AI-native DIY: live for the season with specifics, or slipped to pilot (binary); Credit Karma Tax: scaled launch with targets, or quiet (binary); TurboTax guide held or trimmed. (3) Mailchimp’s first standalone segment disclosure — first filed check of the derived ~$1,267M base. (4) Q1 buyback pace at ~$330 (vs $1.6B in Q3 FY26) and the 10-Q share count. (5) 10-Q litigation update: lead-plaintiff / consolidation status.
Late May 2027 — THE GATE, numeric pass/fail (set Oct 16, 2026, from pre-print evidence only)
- 01TurboTax FY27 revenue growth vs the +2–3% guide: PASS ≥ +2.0% · FAIL ≤ +0.9% (a second straight adverse miss on the load-bearing line).
- 02Units & share: PASS units ≥ 39.0M and IRS e-file share loss ≤ 0.5 pt · FAIL units ≤ 38.2M (a second ≥2% decline) or e-file share loss ≥ 1.0 pt (a repeat of FY26).
- 03TurboTax Live vs its mid-teens guide (Aujla, Q4 FY26 call): PASS ≥ +13% with Live’s share of TurboTax revenue above 53% · FAIL < +10% or Live share ≤ 50%.
- 04SBC glide: PASS FY27 SBC ≤ $2.05B and ≤ 9.0% of revenue (the guide embeds $2.02B ≈ 8.6%) · FAIL SBC > $2.15B or > 9.6% of revenue (back at FY26’s ratio — the glide abandoned).
- 05Stage-1 owner earnings: PASS FY27 total owner-earnings growth ≥ +15% (post-gate bar ≤ ~+4.2%/yr on the grid) · FAIL ≤ +8% (post-gate bar +5.21%/yr).
- 06Binary watch, any date: a frontier agent pairing with a licensed e-file engine, or a lab tax-engine deal with anyone but Intuit, reprices the moat before the numbers do.
Mailchimp FY2026 revenue is derived, not filed
Stated, not smoothed- ·Mailchimp FY2026 revenue is derived, not filed (~$1,267M back-solved from the FY27 guide of $1,256–1,266M at −1% to 0%); first filed check comes with FY27 segment reporting. Standalone operating income is undisclosed; the decomposition’s pro-rata allocation likely flatters it.
- ·Lead-plaintiff movants unidentified from Tier 1 sources: the Sep 8, 2026 motion papers are not in RECAP’s free collection (CourtListener returned 403 to the desk’s fetch on Oct 16, 2026); movants and claimed losses are therefore unstated.
- ·Partner economics beyond the headlines are undisclosed: OpenAI’s $100M+/yr is release-sourced; Anthropic, Perplexity and Meta terms are undisclosed; the claimed Google/Gemini relationship rests on one executive name-check, no product or release found.
- ·TurboTax AI capability figures (90% of forms auto-ingested, 80% of simple returns pre-prepared) are company-asserted; no independent accuracy benchmark exists.
- ·Capex definition: owner earnings use purchases of property & equipment ($175M FY26). The 10-K MD&A’s $221M adds $46M of capitalized internal-use software; on that definition FY26 owner earnings would be $6,561M, not $6,607M.
- ·Original 2019 Big Bets numeric targets were not re-sourced; strategy scoring is outcome-based against FY26 delivery.
Corrections (Oct 16, 2026)
Vs the Oct 16, 2026 (v2) edition of this page- 1Credited-bar convention (desk discrepancy D-03). The v2 page printed credited bars per-share (+7.9% normalized, +4.9% reported) — the opposite convention to the other desk dives. They are now required total owner-earnings growth: +3.3%/yr normalized, +0.5%/yr reported, per-share figures as a labeled memo. Math unchanged — one identity, (1 + per-share bar) × (1 − 2.12% shrink) = (1 + flat bar).
- 2FY26 buyback basis — reconciled. The v2 page printed $5,412M as “FY26 repurchases.” That is the cash-flow statement’s cash paid; the filed equity statement records 13.366M shares retired for $5,463M ($408.72 average). The $51M bridge ties exactly: $5,463M − $17M (repurchase amounts due, Note 8) − $34M (excise-tax payable, Note 8) = $5,412M cash paid.
- 3The FY26 cash-flow mechanism was mislabeled. The v2 page attributed FY26’s +42% operating-cash-flow rise to “working-capital swings.” The filed statement says otherwise: of the +$2,631M increase, the deferred-income-tax add-back supplied +$1,714M (65.1%), net income +$697M, SBC + depreciation/amortization +$125M, working capital just +$202M (7.7%). The normalization conclusion is unchanged; the flattering item is a tax-timing add-back.
- 4TurboTax Live guide citation. “Mid-teens” FY27 Live growth is call guidance (Aujla, Q4 FY26 call, Aug 25, 2026); it is not in the filed release’s guidance table. Now cited as call guidance wherever used, including the gate thresholds.
- 5Reconciliation vs the Oct 13, 2026 dive ($307.14) — every delta is price. Same bases to the dollar (normalized $5,381M, reported $6,607M), same definitions and stack: bars rose +4.6% → +5.6% (normalized) and +1.7% → +2.7% (reported). Non-price note: Oct 13’s $307.14 was intraday (close $301.45; close-to-close +9.5%). The Oct 13 dive’s sharpest line is retired: at $307.14 the reported-base price sat below zero years of growth; at $330.17 the reported CAP is ~0.9 years — a stub of growth is now paid for.