Intuit stock falls despite RBC’s $850 price target as Q1 guidance disappoints

Investing.com - Intuit (NASDAQ:INTU) shares fell approximately 6% in after-hours trading despite RBC Capital reiterating its Outperform rating and $850 price target on the financial software company. The company, currently valued at nearly $195 billion, trades at a P/E ratio of 56.3x, reflecting its premium position in the software industry. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.

The stock decline came after Intuit delivered its fourth-quarter results, which showed revenue growth of 20% for the quarter and 16% for fiscal year 2025. The company maintains impressive gross profit margins of 80.4% and has demonstrated strong financial health, earning a "GOOD" rating from InvestingPro’s comprehensive analysis system. Despite these solid results, investors appeared concerned about the company’s first-quarter fiscal 2026 guidance, which RBC described as "light."

Intuit’s performance was broad-based across its product lines, with its GBS segment growing 18% year-over-year, TurboTax Live surging 47%, and Credit Karma accelerating 32%. The company also achieved solid margin expansion during the period.

RBC Capital analyst Rishi Jaluria noted that Intuit’s new AI-driven agents are seeing "early traction with millions of users" but remain excluded from the company’s fiscal year 2026 guidance, suggesting potential upside not yet reflected in forecasts.

RBC maintained its $850 price target on Intuit stock, which the firm noted implies approximately 32 times calendar year 2026 estimated free cash flow, reflecting continued confidence in the company’s long-term prospects despite the near-term guidance concerns. InvestingPro subscribers can access 15+ additional key insights about Intuit, including detailed valuation metrics, financial health scores, and comprehensive Pro Research Reports that transform complex Wall Street data into actionable intelligence.

In other recent news, Intuit has reported its fiscal fourth-quarter results, revealing revenue and non-GAAP operating income that exceeded Street expectations. Despite this, the company provided a conservative revenue growth guidance of 15% for the first quarter of fiscal 2026, falling short of the anticipated 16%. Various analyst firms have adjusted their price targets for Intuit, reflecting these developments. KeyBanc lowered its target to $825 while maintaining an Overweight rating, citing challenges with Mailchimp. UBS adjusted its target to $725, maintaining a Neutral rating due to the conservative guidance. Stifel and BofA Securities both set their targets at $800, with Stifel highlighting strong performance in the Credit Karma segment and BofA noting stability in QuickBooks and TurboTax growth algorithms. Despite these adjustments, Goldman Sachs reiterated its Buy rating with an $860 price target, even as Intuit’s Consumer segment underperformed and free cash flow margin missed expectations.

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