“We lost on price.” Those four words from Intuit CEO Sasan Goodarzi reveal something important. While investors worry that artificial intelligence will destroy TurboTax, Intuit’s more immediate problem may be far less dramatic: some customers simply believe it costs too much.
That tension sits at the heart of the Intuit investment case. Is this a deeply embedded financial platform being undervalued by an anxious market—or a mature software company facing disruption from several directions at once?
More Than Accounting Software
Intuit began with Quicken in 1983, when personal finance still involved cheque books, filing cabinets and calculators. It successfully crossed the bridge from desktop software to cloud subscriptions—something many established technology companies failed to do.
Today, approximately 100 million customers use products including QuickBooks, TurboTax, Credit Karma and Mailchimp.
But Intuit’s real strength is not simply its software. It is the financial plumbing running underneath millions of households and businesses.
If a small company uses QuickBooks for accounting, payroll, payments, lending and tax reporting, changing provider is rarely as easy as changing a music-streaming app. Years of financial records, employee information, banking connections and accountant relationships are all tied together.
That creates switching costs—and switching costs are one of the oldest and strongest business moats.
QuickBooks Online Accounting revenue increased 22% in the third quarter of FY2026, while total company revenue rose 10%. Intuit also produces gross margins of around 80% and an estimated free-cash-flow margin of 37%.
This is the sort of business model investors usually admire: recurring revenue, limited physical capital requirements and plenty of cash left after paying the bills.
The AI Question Is Bigger Than Tax Returns
The obvious question is: can AI prepare a tax return or maintain a set of books?
The answer is probably yes.
But that may be the wrong question.
The more important question is: who will own the financial workflow, the trusted data, the compliance responsibility and the movement of money?
An AI assistant may explain a tax rule, but somebody still needs to ensure the figures are correct, submit the return, store the records and take responsibility when something goes wrong. Intuit already has the data, regulatory knowledge and customer trust to perform those jobs.
The opportunity is that Intuit uses AI to make QuickBooks and TurboTax faster, simpler and more valuable. Its Intuit Assist, GenOS and automated agents could become the financial equivalent of having an accountant quietly working in the background.
The danger is that somebody else controls the conversation.
If customers eventually begin every financial task through OpenAI, Anthropic or another AI platform, Intuit could become the engine under the bonnet while another company owns the dashboard. That could weaken its brand, pricing power and customer loyalty.
Excellent Economics—With Some Important Footnotes
Intuit is valued at approximately 20 times earnings and 11 times headline free cash flow. That looks interesting for a company whose free cash flow reportedly compounded at around 22% annually over the previous decade.
However, headline cash flow needs careful interpretation.
Intuit awarded employees approximately $1.55 billion of stock-based compensation during the first nine months of FY2026. Although it spent $3.4 billion repurchasing shares, some of those buybacks merely offset new shares issued to employees. Despite substantial repurchases, the share count has reportedly increased by around 7% annually over the past decade.
Buybacks are only valuable when they genuinely reduce each shareholder’s slice of the pie.
There are other reasons for caution. Intuit is cutting approximately 17% of its workforce while redirecting resources towards AI and larger businesses. It has also expanded lending through QuickBooks Capital: loan purchases rose to $4.3 billion during the first nine months of FY2026, while charge-offs and credit-loss provisions increased.
Then there are the acquisitions. Intuit paid $8.1 billion for Credit Karma and $12 billion for Mailchimp. Goodwill and acquired intangible assets now total approximately $18.8 billion—nearly half of its assets. Those deals may eventually prove valuable, but large acquisitions are promises that take years to verify.
TurboTax presents another puzzle. Revenue remains strong, but US tax-return volumes declined 2% in FY2025. Growth increasingly depends on higher prices and customers choosing more expensive assisted services. Management believes recent weakness among lower-income DIY filers is principally a pricing problem rather than an AI problem.
Perhaps it is right. But as Intel’s Andy Grove famously said, “Only the paranoid survive.”
A Business Standing at a Crossroads
Intuit still possesses many of the qualities I look for in a long-term investment: strong brands, recurring revenue, high margins, attractive returns on capital and products woven deeply into customers’ everyday lives.
Yet the next chapter will not be decided simply by whether AI can complete a tax return. It will be decided by whether Intuit remains the trusted place where financial decisions begin and end.
The market appears sceptical, which may be creating an opportunity. But scepticism is not automatically mistaken. Sometimes a lower valuation is a gift; sometimes it is the market quietly acknowledging that the road ahead has changed.
For Intuit, the old moat is built from data, trust and switching costs. The question worth reflecting on is whether AI will deepen that moat—or build a bridge straight across it.
Awet Ghirmay, Head of Investment Research
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Risk warnings
The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change. This blog is based on my own observations and opinions.
