Shares of Intuit (NASDAQ: INTU) plunged more than 7% in after-hours trading on Tuesday after the financial-software company issued a fiscal 2027 revenue outlook that signaled a sharp deceleration from its recent growth trajectory. The guidance, which projects annual revenue growth of 9% to 10%, fell short of the 14% expansion the company delivered in fiscal 2026, prompting a swift selloff that erased approximately $6.9 billion in market capitalization.
The stock had closed the regular session down 2.98% at $358.91, but the after-hours decline pushed the shares further into negative territory. The market's reaction underscores investor concerns about the sustainability of Intuit's growth, particularly as the company's Mailchimp business faces headwinds and a change in accounting treatment for stock compensation complicates comparisons to prior Wall Street estimates.
Guidance Details and Accounting Adjustments
Intuit's management projected adjusted earnings per share for the first quarter of fiscal 2027 in the range of $2.44 to $2.48. However, this figure includes a $1.48 per-share charge related to stock-based compensation, a change from the company's previous non-GAAP methodology. Excluding that charge, the midpoint of the guidance would be $3.94, representing a 2.5% decline from analysts' average estimate of $4.04, rather than the headline 39% drop that the raw numbers suggest.
The revenue guidance, however, is the primary source of concern. Intuit forecasts annual revenue between $23.279 billion and $23.512 billion, implying growth of 9% to 10%. This compares with the 14% increase reported in fiscal 2026, when revenue reached $21.448 billion. The deceleration is most pronounced in the Mailchimp segment, which the company expects to generate between $1.256 billion and $1.266 billion in revenue, indicating growth that is flat at best or down 1% year over year. Intuit plans to report Mailchimp as a separate segment starting in fiscal 2027, highlighting its underperformance relative to other divisions.
Segment Performance and Outlook
Other business units are expected to fare better. Global Business Solutions is projected to grow 13% to 14%, while Credit Karma is forecast to rise 11% to 13%. TurboTax, the company's flagship tax preparation product, is anticipated to see slower growth of just 2% to 3%, reflecting a mature market and competitive pressures.
The fourth-quarter results, which were released alongside the guidance, topped expectations. Adjusted earnings came in at $4.03 per share, above the anticipated $3.58, while revenue reached $4.354 billion, surpassing the consensus estimate of $4.27 billion by roughly 2%. Revenue from the Online Ecosystem climbed 17% to $2.6 billion, with QuickBooks Online Accounting up 20% and Online Services up 15% (or 21% excluding Mailchimp).
Chief Executive Sasan Goodarzi highlighted the company's achievements, noting that Intuit surpassed $20 billion in annual revenue and that its "Big Bets" initiatives expanded by 34%, contributing 30% of total revenue for the year.
Analyst Reactions and Market Context
Wall Street had already been lowering price targets ahead of the earnings report, signaling expectations for a downturn. Jefferies reduced its target from $550 to $500 on August 23, while Citi cut its target from $591 to $457 on August 17. TD Cowen, however, raised its target from $304 to $328 on August 11. The consensus target stands at $446.02, still about 24% above Tuesday's close, but the pre-announcement target reductions suggest analysts were bracing for a less favorable outlook.
Despite the negative reaction, Intuit retains significant financial flexibility. The company held $7.2 billion in cash and investments at the end of July, compared with $7.7 billion in debt. It also repurchased $5.5 billion in shares during fiscal 2026 and has $7.9 billion remaining under its buyback authorization, providing a buffer to support the stock.
Risks and Outlook
The after-hours movement could shift before Wednesday's open, and several factors could alter the trajectory. Higher monetization of QuickBooks or accelerated growth in TurboTax Live might offset Mailchimp's weakness, while a sharper slowdown among small businesses could widen the guidance gap. Investors will be watching closely to see whether the selloff represents an overreaction or a harbinger of further challenges for the software giant.
