Intuit's Stock Price Plunge Represents a Golden Buying Opportunity

If you looked at Intuit's (NASDAQ: INTU) 51% year-to-date drop without any context, it would be easy to assume that the company's fundamentals have deteriorated substantially. Or you might assume that the company's valuation had previously climbed to too lofty a level, and that it had undergone a necessary correction.

However, neither of those things is the case. Intuit is still gaining market share and has high profit margins. And in the wake of its decline, it has an 18.5 price-to-earnings (P/E) ratio. Its valuation hasn't been this low in more than a decade.

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Focus on fundamentals over stock price movements

The stock looks attractive when you combine strengthening fundamentals with a share price that continues to plummet. This mismatch came about because of concerns that AI would inexpensively replace the types of software that Intuit specializes in.

The theory is that if people are able to use AI models to help them do their taxes and handle bookkeeping matters, there won't be much of a need for TurboTax or QuickBooks. Intuit's decision to cut its workforce by 17% earlier this year added to investors' worries on those fronts, but none of these concerns have yet shown up where it matters: in the company's financial results.

Intuit delivered 10% year-over-year revenue growth in its fiscal 2026 third quarter, which ended April 30. Net income also rose by 9% year over year, resulting in a 35.8% net profit margin.

Intuit's revenue is always a bit lumpy, since most of its sales come during tax season. However, it has consistently maintained double-digit percentage revenue growth rates for several years. For instance, it has a five-year compound annual revenue growth rate of 19.7%. While the fintech company's revenue growth has decelerated in recent years, a 10% growth rate does not justify a 51% year-to-date drop.

Intuit doesn't only rely on TurboTax

Revenues from TurboTax are still growing -- they were up by 7% year over year in the company's fiscal Q3 2026. Meanwhile, TurboTax Live is projected to grow by 36% year over year in fiscal 2026, and that makes up more than half of total TurboTax revenue. As this facet of the top line becomes larger, it should accelerate TurboTax's overall growth rate.

Even then, Intuit still has other growth levers. Credit Karma revenue was up by 15% year over year as consumers took out more loans. The global business solutions segment also jumped by 15% year over year.

The global business solutions segment is notable, since it made up almost 40% of Intuit's total revenue. That result prompted Intuit to raise full-year guidance to 16% year-over-year growth for the global business solutions part of the company, which includes QuickBooks and MailChimp.

Intuit's fundamentals tell a different story from its recent stock price movements. As more investors come to recognize that difference, the stock should start to reclaim some of its lost ground.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuit. The Motley Fool has a disclosure policy.