INTU: OpenAI Partnership Will Drive AI Agents And Credit Upside

Narrative Update on Intuit

Analysts have made a modest adjustment to their price target for Intuit, trimming fair value by about $1 to roughly $804 per share as they factor in slightly lower long term growth assumptions, offset by improving margin expectations and increasing confidence in the OpenAI partnership and Credit Karma upside.

Analyst Commentary

Bullish analysts see the recent OpenAI partnership and improving Credit Karma backdrop as key supports for Intuit's premium valuation, even after modestly lower long term growth assumptions. They argue that execution on these vectors could drive upside to both revenue and margins relative to current expectations.

Bullish Takeaways

The OpenAI partnership is viewed as a structural positive, signaling that leading AI platforms prefer to work with Intuit rather than compete directly. This is seen as reducing perceived long term disruption risk embedded in the multiple.
Access to OpenAI's large user base is expected to expand Intuit's distribution funnel for agentic products, supporting higher customer acquisition efficiency and improving the durability of double digit growth.
Recent credit data points from major banks and online lending platforms suggest accelerating demand for credit products, reinforcing expectations for another quarter of Credit Karma revenue upside versus consensus.
Stronger visibility into Credit Karma and AI driven products supports the case for sustained operating leverage, which bullish analysts see as justifying price targets well above the latest fair value trim.

Bearish Takeaways

Cautious analysts highlight that despite the OpenAI partnership, integrating and monetizing agentic experiences at scale remains execution heavy and could take longer than bulls anticipate. This may limit near term upside to estimates.
The premium valuation already embeds substantial optimism around AI monetization and Credit Karma acceleration, leaving less room for error if macro credit conditions or competitive dynamics soften demand.
Dependence on external AI platforms introduces an additional layer of strategic and pricing risk over time, which some bearish analysts see as a potential constraint on long term margin expansion.
Any disappointment in fiscal Q1 results, particularly around Credit Karma growth relative to elevated expectations, could trigger a de rating as investors reassess the sustainability of current growth assumptions.

What's in the News

The Trump administration plans to end the IRS's free Direct File tax program, which signals renewed reliance on private tax software providers such as Intuit and H&R Block and may increase industry demand (Wall Street Journal)
Intuit launches new AI and Agentic AI experiences across Credit Karma and TurboTax to create an all-in-one consumer platform for automated personal finance and tax management
Intuit announces a multiyear strategic partnership with OpenAI to embed Intuit-powered financial apps directly into ChatGPT and deepen its use of OpenAI models under a contract exceeding $100 million
Intuit provides and reiterates fiscal 2026 guidance, projecting low- to mid-teens revenue growth and high-teens GAAP operating income growth
Intuit expands its AI-native Enterprise Suite through new partnerships with Rehmann and Cherry Bekaert, targeting more complex mid-market businesses with an integrated ERP alternative to legacy systems

Valuation Changes

Fair Value: edged down slightly from approximately $805.22 to $803.89 per share, reflecting modestly lower long term growth assumptions.
Discount Rate: declined marginally from about 8.58 percent to 8.55 percent, implying a slightly lower perceived risk profile or cost of capital.
Revenue Growth: trimmed very slightly from roughly 12.79 percent to 12.78 percent, indicating a minor reduction in long term top line expectations.
Net Profit Margin: increased fractionally from about 23.15 percent to 23.16 percent, signaling a small improvement in expected profitability.
Future P/E: ticked up modestly from around 43.58x to 43.63x, suggesting a marginally higher valuation multiple on forward earnings.

Accelerating AI-driven platform adoption and expanding financial services offerings drive automation, customer retention, and multi-product cross-selling for sustained margin and revenue growth.
Penetration into mid-market segments and integration across consumer tax and credit products expand Intuit's reach, fueling durable customer acquisition and diversification.
Sluggish Mailchimp growth, international headwinds, limited pricing power, Credit Karma's cyclicality, and slow adoption of integrated AI initiatives present risks to sustained revenue expansion.

Catalysts

About Intuit

Provides financial management, compliance, and marketing products and services in the United States.What are the underlying business or industry changes driving this perspective?

The accelerating adoption of Intuit's AI-driven all-in-one platform-including virtual teams of AI agents and human experts-positions the company to consolidate customers' tech stacks, drive automation of workflows, and unlock substantial ROI for customers, supporting higher average revenue per customer (ARPC) and net margin expansion over time.
Intuit's rapid penetration into the fast-growing mid-market segment (serving customers with $2.5M–$100M in revenue and tapping into an $89B–$90B TAM), bolstered by quarterly product innovations and expanding partnerships with top accounting firms, sets up a durable multi-year revenue growth vector through new customer acquisition and cross-sell opportunities.
Breakthrough adoption and continued innovation in TurboTax Live, which is experiencing growth well above long-term expectations, alongside seamless integration with Credit Karma, expands Intuit's addressable consumer base as individuals seek more digital, DIY, and assisted tax solutions-directly supporting recurring revenue growth and increasing upsell potential.
Strong momentum in adjacent financial services offerings (payments, payroll, bill pay, QuickBooks Capital, and banking integrations) increases customer stickiness, enhances multi-product adoption, and diversifies Intuit's revenue streams-positively impacting both top-line growth and customer lifetime value.
Intuit's ability to leverage secular trends-like the proliferation of digital-native SMBs, gig and freelance work, and increased demand for financial literacy tools-underpins sustained growth in both customer numbers and revenue as more consumers and businesses migrate to cloud-based platforms for all-in-one financial management.

Intuit Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Intuit's revenue will grow by 12.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 20.5% today to 22.9% in 3 years time.
Analysts expect earnings to reach $6.2 billion (and earnings per share of $21.54) by about September 2028, up from $3.9 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $7.3 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 46.5x on those 2028 earnings, down from 48.3x today. This future PE is greater than the current PE for the US Software industry at 36.2x.
Analysts expect the number of shares outstanding to decline by 0.53% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.5%, as per the Simply Wall St company report.

Intuit Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Mailchimp's continued revenue softness and complexity for SMB users remains a drag on growth, with recovery to double-digit growth projected to be gradual and subject to execution risk-potentially dampening segment revenue and overall earnings growth if improvements stall or churn persists.
Growth in online ecosystem paying customers was only 5% year-over-year, with stated headwinds in Mailchimp and international segments, demonstrating possible saturation risks or weakness in expanding international markets, which could suppress long-term revenue growth and net new customer acquisition.
The company expects a lower pricing uplift in fiscal 2026 compared to fiscal 2025 across desktop and services offerings; as pricing actions have contributed to growth, this pullback could limit future ARPC (Average Revenue Per Customer) expansion and margin improvement.
Credit Karma's business, although strong this year, is recognized by management and analysts as being more cyclical than other Intuit segments and heavily exposed to consumer lending and credit markets, making its contribution to revenue and earnings volatile and potentially sensitive to macroeconomic slowdowns or tighter lending environments.
While Intuit is investing aggressively to consolidate tech stacks and use AI agents for automation and cross-sell, the success of these efforts depends on overcoming customer inertia and fragmentation (i.e., businesses reluctant to switch from disparate apps); slow adoption or pushback could limit cross-sell rates, ARPC, and platform monetization, with prolonged ramp times impacting future revenue scalability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $819.73 for Intuit based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $971.0, and the most bearish reporting a price target of just $600.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $26.9 billion, earnings will come to $6.2 billion, and it would be trading on a PE ratio of 46.5x, assuming you use a discount rate of 8.5%.
Given the current share price of $670.89, the analyst price target of $819.73 is 18.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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