Does Intuit’s Recent AI Integration Signal Room for Stock Growth in 2025?

Wondering what to do with Intuit stock lately? You’re not alone. With the shares closing at $644.92 recently, investors everywhere are debating whether it’s time to buy, hold, or reconsider their positions. Despite a dip of -5.4% over the past week and a -3.9% slide for the month, Intuit’s long-term performance is hard to ignore. Over the last three years, the stock has powered up a remarkable 66.2%, and stretching back five years, it’s delivered a stellar return of 94.6%.

What’s been driving these moves? Market watchers are pointing to a broader tech pullback and changing growth expectations, along with the fact that investors are reassessing risk premiums across the industry. Still, Intuit’s core businesses continue their momentum, and the company has managed to edge out a gain of 3.6% so far this year, even with recent volatility.

If you’re weighing the stock now, the real question is: how much is too much to pay for a high-quality software company like this? Using six valuation checks, Intuit currently scores a 3 out of 6 for being undervalued, suggesting it’s not a slam-dunk bargain but not seriously overpriced either.

So, how do those valuation checks stack up, and which methods matter most for a company like Intuit? Let’s break down each approach and stick around to the end, where I’ll share a perspective on valuation that offers more insight than any single metric can provide.

Why Intuit is lagging behind its peers

Approach 1: Intuit Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today's dollars. This process reflects what those future earnings are worth in present terms. For Intuit, this approach starts by examining its most recently reported free cash flow, which totaled approximately $5.97 billion.

Analysts project Intuit’s free cash flow to steadily rise over the coming years, reaching around $11.66 billion by fiscal 2030. After the first five years, these projections rely more on trend extrapolation than on specific analyst forecasts. In this case, Simply Wall St uses future estimates to develop a ten-year outlook.

After entering all this data into the DCF model, the intrinsic value per share is calculated at $735.40. Compared to Intuit's current share price of $644.92, the DCF model indicates the stock is trading at a 12.3% discount to its estimated fair value. By this method, the shares appear undervalued, highlighting potential upside for those who believe in the company’s long-term prospects.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Intuit.

Our Discounted Cash Flow (DCF) analysis suggests Intuit is undervalued by 12.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Intuit Price vs Earnings

The price-to-earnings (PE) ratio is a go-to valuation tool for profitable companies like Intuit because it reflects the price investors are willing to pay today for a dollar of current earnings. This measure helps gauge whether the market is optimistic about a company’s future or signals caution in the face of risk. Generally, higher growth prospects or lower risks can justify a higher “normal” PE ratio, while greater uncertainty or slower expected growth should command a lower one.

Currently, Intuit trades at a PE ratio of 46.5x. Compared to the software industry’s average of 35.8x, and even its direct peer group at 57.7x, Intuit sits somewhat above the broader sector but below its closest rivals. However, relying solely on these benchmarks can be misleading, because not all companies are created equal. Factors like profitability, market position, and future growth can vary widely.

That is where Simply Wall St’s “Fair Ratio” comes in. This proprietary metric estimates what Intuit’s PE ratio should be, considering its unique blend of earnings growth, profit margins, market cap, risk profile, and industry landscape. Instead of just comparing to generic averages, the Fair Ratio tailors the multiple based on what actually drives value for Intuit. For Intuit, the Fair Ratio is calculated at 43.6x, which is only modestly below the company’s current PE ratio.

Given the narrow difference, this suggests that Intuit stock trades at roughly fair value by this measure. It is not a bargain, but not meaningfully overpriced either.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Intuit Narrative

Earlier, we mentioned a better way to understand valuation, so let’s introduce you to Narratives. A Narrative is an easy way to connect your investment outlook—the story you believe about a company’s future—with the numbers. Rather than relying only on ratios or models, a Narrative lets you frame your assumptions about Intuit’s future revenue, earnings, and profit margins, and see how they translate into an actual fair value estimate.

Narratives tie together a company’s story (your view on its prospects and challenges), a real financial forecast, and a share value. This helps you make sense of how business drivers could move the stock and when the current price is above or below what you think is fair. On Simply Wall St’s Community page, Narratives are updated automatically as new data and news are released, making them a dynamic tool used by millions of investors to inform buy or sell decisions.

For Intuit, one investor’s Narrative might forecast rapid adoption of AI-powered financial tools and multi-product growth, which could justify a bull case consensus target of $971. Another investor may worry about international headwinds or Mailchimp’s struggles, putting fair value closer to $600. Instead of following the crowd, Narratives empower you to invest with your own conviction, backed by numbers and story together.

Do you think there's more to the story for Intuit? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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