Intuit Inc (INTU)

Conclusion

Intuit Inc (INTU.US) is a US software company. Its products include QuickBooks for small and mid-sized businesses, TurboTax and Credit Karma for consumers, and Mailchimp for marketing. At a price of 338.23 USD on 2026-11-09, the market capitalisation is 90.4 billion USD.

The verdict is undervalued. The price-to-earnings ratio of 19.8 compares with a ten-year median of 49.4, a premium of -60.0%. Enterprise value to EBITDA of 12.9 compares with a median of 35.5, a premium of -63.7%. The discounted cash flow gives 774.58 USD per share at a discount rate of 9.48%. The fair value band runs from 669.46 to 1,004.20 USD with a midpoint of 836.83 USD, giving a margin of safety of 147.4% at the current price. The reverse DCF implies growth of 1.6% a year, while revenue grew at a five-year compound rate of 17.4% and free cash flow per share at 22.1%.

What holds the case up is the return on capital: ROIC of 23.6% against a WACC of 9.0%, and free cash flow conversion of 188.7% over the last twelve months. Interest coverage of 24.5x supports the balance sheet. The weakest numbers are the current-year estimate revisions, down 12.8% over the last 90 days, the share of the DCF value that sits in the terminal value at 59.1%, and the next-year estimate revisions, down 12.5% over 90 days.

Financial health

Financial strength is green, held up by all four assessed measures: a current ratio of 1.51, net debt to EBITDA of 0.17 and interest coverage of 24.5x. The quick ratio is 0.77 and debt to equity is 0.44. The Altman Z-score is 5.09, in the safe zone, although that model was designed for manufacturers and Intuit is a software company. Insolvency risk: low, about 0.1% by the estimate of the Ohlson model over one to two years. The company's debt has grown 10.3% a year over five years, measured against revenue growth. No debt maturity schedule is available, so the timing of repayments cannot be assessed.

Earnings quality

Earnings quality is green, with all four assessed measures good. Free cash flow conversion is 188.7% over the last twelve months and 175.3% over five years. The accrual ratio is -11.6%, which means cash earnings exceed reported earnings. Stock-based compensation is 9.6% of revenue, and free cash flow after it is 6.56 billion USD. The five-year share count change is 0.3% a year, so buybacks are not offsetting dilution. The Piotroski score is 7 out of 9 and the Beneish M-score is -3.59, a reading the model labels unlikely. Intuit beat estimates in all 8 of the last quarters, with an average surprise of 10.5%. Estimate revisions are negative, as noted above.

Profitability

Profitability is green. The operating margin of 28.8% is above its ten-year median of 26.1%, and the net margin of 21.3% is above its median of 20.9%. The gross margin of 80.2% is slightly below its median of 81.6%. ROIC of 23.6% against a WACC of 9.0% gives the reported ROIC minus WACC value of 14.6%, and the company creates value on that measure. The five-year median ROIC is 13.8%. The DuPont split shows that the return on equity of 24.0% comes mainly from margins, with a net margin of 21.3% and an asset turnover of 0.58. The equity multiplier of 1.94 adds only modest leverage.

Growth

Growth is green. Revenue compounded at 14.3% over three years, 17.4% over five years and 16.4% over ten years. Earnings per share compounded at 25.1%, 16.9% and 16.1% over the same periods. Revenue grew in all 10 of the last 10 years. Analysts expect earnings per share to grow 13.2% next year, although that estimate has been cut over the last 90 days.

Valuation

Valuation is green, based on the single verdict measure, which is good. Today's multiples are well below their ten-year medians: price-to-earnings 19.8 against 49.4, price-to-free-cash-flow 10.5 against 32.5, and price-to-sales 4.2 against 10.4. The DCF gives 774.58 USD per share at a discount rate of 9.48%, and the fair value from historical multiples is 899.08 USD. The DCF rests mostly on the terminal value, and the fair value band is an estimate built on fixed assumptions, not a price target. The reverse DCF implies 1.6% growth, against revenue growth of 17.4% over five years. The dividend yield is 1.5%, with a payout of 15.6% of free cash flow.

Risks

If free cash flow fell, the low price-to-free-cash-flow multiple and the high conversion would both be affected. A further cut to estimates would weaken the growth case, which the price already discounts heavily. Because 59.1% of the DCF value sits in the terminal value, small changes in the long-term assumptions would move the result considerably. The company does not report a debt maturity schedule or revenue by segment, so these risks cannot be measured here. The analysis relies only on the figures provided and does not cover events after the dates shown.