Intuit (NASDAQ:INTU) saw its shares tumble roughly 11% in premarket trading Wednesday after the company issued a fiscal 2027 revenue forecast that came in below Wall Street expectations. The software giant's guidance reflects deliberate strategic shifts aimed at boosting customer growth, even if it means sacrificing near-term sales.
For fiscal 2027, Intuit projects revenue between $23.28 billion and $23.51 billion, representing growth of 9% to 10%. That would mark a slowdown from the 14% growth recorded in fiscal 2026 and fall short of the $23.72 billion analysts had anticipated, according to LSEG data. The company attributed the softer outlook to weakness at Mailchimp, continued declines in desktop products, and lower average revenue per TurboTax customer as it pivots toward attracting more users.
Despite the cautious guidance, Intuit's fiscal fourth-quarter results beat expectations. Revenue rose 13.6% year over year to $4.35 billion, surpassing the $4.27 billion consensus. The company also guided fiscal 2027 adjusted earnings per share to $22.88–$23.12, including a $5.81 impact from stock-based compensation, well below the $27.32 analysts were looking for. First-quarter revenue guidance of $4.29 billion to $4.31 billion also came in under the $4.36 billion estimate.
The stock has been under heavy pressure, falling from a record high of $812 in July last year to around $357, a decline of 43% year-to-date. Investor concerns have centered on the potential disruption from AI-powered tools, though the company's latest results suggest AI is actually expanding its business rather than eroding it.
TurboTax strategy shifts toward customer growth
A central element of Intuit's new approach is accepting lower revenue from individual TurboTax users in exchange for expanding its customer base. The company acknowledged losing "quality DIY customers to low-cost providers" during the latest tax season as cheaper alternatives proliferated. CEO Sasan Goodarzi noted that "price is now the number 1 reason customers leave TurboTax."
Historically, Intuit focused on maximizing tax revenue and average revenue per customer by steering users toward higher-value products. Now, the company is prioritizing customer acquisition and retention, deliberately accepting lower initial DIY tax ARPC to grow e-file share and create greater lifetime value. CFO Sandeep Aujla said the fiscal 2027 outlook reflects these deliberate actions, resulting in lower tax ARPC. TurboTax revenue is expected to grow only 2% to 3% in fiscal 2027, compared with 7% in fiscal 2026.
QuickBooks also moves toward lower prices
Intuit is applying a similar strategy to QuickBooks, introducing free and lower-cost products to widen its small-business funnel. QuickBooks Free and QuickBooks Lite are designed to attract new users, with monetization expected through payments adoption and upgrades to paid tiers. As of last month, QuickBooks Free had over 20,000 customers either actively using the product or converting to paid offerings.
This represents a broader shift from maximizing revenue from existing customers to building a larger base that could generate greater lifetime value over time. However, investors are being asked to accept slower near-term growth while the strategy is tested.
Analysts split over Intuit's prospects
Wall Street is divided on the stock. Jefferies maintained a Buy rating and $500 price target, arguing that the conservative outlook sets a low bar for Intuit to clear. The firm noted that fiscal 2027 revenue growth of 9% to 10% would be a decline of more than 400 basis points from fiscal 2026 and mark the first time since fiscal 2015 that growth could fall below 10%. Jefferies also highlighted the weakness in TurboTax guidance, which at 2% to 3% is below H&R Block's 4.8% outlook, and noted TurboTax revenue has not grown below roughly 7% in the past 11 fiscal years.
Morgan Stanley took a more cautious stance, cutting its price target to $315 from $335 while keeping an Equalweight rating. The firm said execution risk remains high until Intuit demonstrates that its pricing reset can successfully drive customer growth. Nevertheless, Morgan Stanley acknowledged that Intuit appears inexpensive at roughly 14 times calendar 2027 earnings. Mizuho retained its Outperform rating and $430 price target.
AI remains a key part of the investment case
Intuit's earnings also provided evidence that artificial intelligence is supporting rather than replacing parts of its business. "The fourth quarter backs up Intuit's argument that AI is expanding its business rather than hollowing it out, yet the slower growth guide suggests the company itself isn't promising the acceleration continues at the same pace," said Gadjo Sevilla, analyst at Emarketer.
With shares down about 43% this year, investors are weighing the company's lower valuation against the uncertainty surrounding its growth strategy. The central question is whether accepting lower revenue per customer today can generate enough additional users, market share, and lifetime value to justify the trade-off. For context, other tech names have faced similar pressures; for instance, Dick's Sporting Goods shares plunged 19% on a lowered outlook, and XPeng shares fell 10% on weak guidance. Intuit's situation, however, is unique given its dominant position in tax and accounting software.
This article is for informational purposes only and does not constitute financial advice.
