Intuit Stock Was Absolutely Hammered After a Beat-and-Raise Quarter. Time to Buy on the Dip?

Shares of financial software giant Intuit (NASDAQ: INTU) plunged 20% on Thursday after the company reported its latest quarterly results and outlined plans to cut about 17% of its full-time workforce. That drop comes on top of an already brutal year for the stock, leaving shares down more than 50% in 2026 and even further below the all-time high of about $814 reached last summer.

What is unusual about this drop is that it followed what investors usually cheer: results above the company's own guidance and a higher full-year forecast. The maker of TurboTax, QuickBooks, Credit Karma, and Mailchimp also said it would expand its share repurchase program and raise its dividend.

But there was a darker backdrop to the news. The market is asking whether artificial intelligence (AI) tools could erode the very part of Intuit's franchise that was supposed to be its moat. So has the sell-off gone too far, or are the worries justified?

Image source: Getty Images.

Solid numbers and a raised outlook

Intuit's fiscal third quarter of 2026 (the period ended April 30, 2026) is the company's seasonally biggest one, and the headline numbers were solid. Total revenue climbed 10% year over year to $8.6 billion, and non-GAAP (adjusted) earnings per share rose about 10% to $12.80.

Strength across the business was broad-based.

Credit Karma revenue jumped 15% to $631 million, with strength across personal loans, auto insurance, and home loans. In addition, the global business solutions segment, which houses QuickBooks and Mailchimp, grew 15% to $3.3 billion, and its overall online ecosystem revenue increased 19% -- or 22% excluding Mailchimp. And QuickBooks Online Accounting revenue rose 22%, driven by higher prices and a shift toward higher-tier plans.

Management also raised its full-year revenue forecast to a range of $21.341 billion to $21.374 billion, implying roughly 13% to 14% growth, and lifted its adjusted earnings per share guidance to $23.80 to $23.85 -- a roughly 18% increase. To top it off, Intuit's board approved a new $8 billion repurchase authorization and a 15% hike in the quarterly dividend to $1.20 per share.

So on paper, a lot went right.

What's worrying the market

The piece that didn't go right was at the heart of the company's most recognizable brand. TurboTax revenue grew just 7% in the quarter, and Intuit also reduced its full-year TurboTax outlook to about 7% growth.

Most of that pressure came from price-sensitive do-it-yourself filers earning under $50,000.

"We lost on price," CEO Sasan Goodarzi said plainly during the company's fiscal third-quarter earnings call when discussing low-end filers.

For the rest of TurboTax, the company is leaning into TurboTax Live, its assisted-filing product, which it expects to grow about 36% this year and account for roughly 53% of TurboTax revenue. That is a real shift in business mix, but it also concentrates more of Intuit's growth on a category where AI-powered assistants from new entrants could increasingly compete.

The other source of unease is the speed at which growth is slowing. Total revenue grew 17% in Intuit's fiscal second quarter (the period ended Jan. 31, 2026) before easing to 10% in fiscal Q3. And Intuit's plan to cut about 17% of its full-time workforce (about 3,000 jobs) isn't a small adjustment; the company expects $300 million to $340 million in related charges in the current quarter and says the move is meant to simplify the organization, not directly replace people with AI.

Even so, the price the market is now putting on Intuit is starting to look attractive. The shares trade at roughly 14 times the midpoint of management's fiscal 2026 adjusted earnings guidance -- well below the thirties multiple the stock often commanded in recent years. By that measure, a lot of bad news already seems baked in.

But that low valuation multiple may still be appropriate, given the risks. AI will only continue to get better, and while it will likely help Intuit's business, it will likely remain a constant threat as well. And while the most price-sensitive end of the tax market is a problem now, investors can't rule out the possibility that Intuit will eventually face pressure in the higher-end tax help market, too. Finally, the company's own restructuring could create execution wobbles before any benefits show up.

Overall, Intuit's underlying platform still looks healthy, and the company is returning capital to shareholders. Yet with growth decelerating and the AI disruption story unlikely to fade soon, investors leaning toward buying the dip should size positions accordingly -- and brace for a bumpy ride.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuit. The Motley Fool has a disclosure policy.