Intuit earnings put Morgan Stanley stock forecast to the test

The institution reported fiscal third-quarter revenue of $8.56 billion, up 10% from a twelvemonth earlier, portion GAAP diluted net per stock roseate 11% to $11.09. Non-GAAP diluted net per stock climbed 10% to $12.80, arsenic Consumer gross accrued 8% and Global Business Solutions gross roseate 15%.

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Those results landed aft Morgan Stanley framed the 4th arsenic a cardinal trial for Intuit. In a enactment fixed to TheStreet by Morgan Stanley, expert Keith Weiss kept an Overweight standing connected Intuit, named it a Top Pick successful large-cap software, and acceptable a $580 terms people connected the stock. The enactment said shares had fallen astir 40% twelvemonth to day earlier the study and traded astatine 19 times calendar 2027 GAAP EPS, creating what Morgan Stanley viewed arsenic a favorable risk-reward setup.

Intuit raised its full-year fiscal 2026 gross outlook to a scope of $21.34 cardinal to $21.37 billion, representing maturation of astir 13% to 14%. It besides raised its outlook for non-GAAP operating income and non-GAAP EPS, with the institution present expecting non-GAAP EPS of $23.80 to $23.85.

TurboTax inactive carries the statement

In the quarter, Intuit said Consumer gross roseate to $5.3 billion, portion TurboTax gross grew 7% to $4.4 billion. Credit Karma gross accrued 15% to $631 million, driven by spot successful idiosyncratic loans, car insurance, and location loans, portion ProTax gross was level from the anterior year.

The company’s full-year taxation guidance showed some the spot and the unit successful the business. Intuit expects TurboTax Live gross to turn 36% to $2.8 cardinal and correspond astir 53% of full TurboTax revenue, with TurboTax Live customers expected to turn 38%. At the aforesaid time, the institution expects full TurboTax Online units to diminution astir 2%, TurboTax stock of e-files to diminution astir 1 point, and pay-nothing customers to autumn to astir 7 cardinal from 8 cardinal past year.

The enactment said investors were disquieted that lower-cost taxation options and AI-native entrants could unit TurboTax units and mean gross per customer, particularly among elemental DIY filers. Morgan Stanley argued TurboTax inactive has advantages successful user trust, prior-year continuity, tax-form imports, integrated filing workflows, refund visibility, and entree to adept assistance erstwhile returns go much complex.