Intuit Inc. (NASDAQ:INTU) shares fell on Thursday after the company reported third-quarter results on Wednesday, announced a 17% workforce reduction, and issued a weaker-than-expected outlook.
Weak Tax Filing Trends Pressure Shares
Despite the earnings beat, investors focused on weakening tax filing trends, lower TurboTax online volumes, restructuring plans, and softer guidance.
CEO Sasan Goodarzi said total IRS filers are expected to decline about 30 basis points this season, representing an industry-wide contraction of roughly 2 million filings since the post-COVID period.
TurboTax online units are expected to decline about 2%, while pay-nothing customers fell to 7 million from 8 million.
Goodarzi said "we lost on price" among the most price-sensitive DIY filers earning less than $50,000 annually.
Management said the company plans to "evolve our business model" as customers increasingly spend more on tax and accounting experts than software alone.
Intuit plans to launch an expanded lineup of AI-driven expert platforms in August.
Q3 Results Beat Estimates
Intuit reported third-quarter revenue of $8.56 billion, topping estimates of $8.53 billion. Adjusted earnings came in at $12.80 per share, above the $12.28 per-share estimate.
Total revenue rose 10% year-over-year, driven by 15% growth in Global Business Solutions revenue, 8% growth in Consumer revenue, and 19% growth in Online Ecosystem revenue.
Intuit expects full-year revenue of $21.34 billion to $21.37 billion, above estimates of $21.23 billion, and raised adjusted EPS guidance to $23.80-$23.85 from $22.98-$23.18, versus estimates of $23.20.
Workforce Cuts And Buyback
Intuit plans to reduce its workforce by about 17% to simplify operations and streamline parts of its engineering and product teams, including Mailchimp-related investments.
The company expects restructuring charges of about $300 million to $340 million, largely in the fourth quarter.
Separately, Intuit's board approved a new $8 billion share repurchase authorization.
CFO Sandeep Aujla said the company expects to deliver more than $25 billion in refunds this year through its Fast Money offerings.
INTU Technical Analysis: Trend, Key Support And Resistance
The stock has been in a downward trend and has continued to trade below key short- and long-term moving averages.
The relative strength index (RSI) is 45.08, indicating neutral momentum and suggesting the stock is neither overbought nor oversold at this time.
- Key Resistance: $393.00 — This level is significant as it aligns with the 20-day SMA, which has historically acted as a barrier for upward price movement.
- Key Support: $342.11 — This is the 52-week low, providing a critical level for potential price stabilization.
INTU Analyst Price Targets
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $693.63. Recent analyst moves include:
- TD Cowen: Buy (Lowers Target to $576.00) (May 11)
- Rothschild & Co: Upgraded to Buy (Raises Target to $700.00) (March 10)
- Citigroup: Buy (Lowers Target to $649.00) (March 2)
INTU Price Action: Intuit shares were down 20.38% at $305.68 at the time of publication on Thursday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
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