Is INTU Stock a Buy, Hold or Sell After Its 12.8% Plunge in 3 Months?

Core Insights - Intuit Inc. has reported strong fiscal fourth-quarter and full-year 2025 results, yet its shares have declined by 12.8% over the past three months, underperforming the broader market and peers [1][2]. Financial Performance - Full-year revenues for fiscal 2025 increased by 16% to $18.8 billion, with fourth-quarter revenues surging by 20% to $3.8 billion [5][9]. - GAAP operating income grew by 36% to $4.9 billion, and non-GAAP EPS advanced by 19% to $20.15 [5]. Growth Drivers - The launch of a virtual team of AI agents is expected to drive significant growth across QuickBooks, TurboTax, and the broader ecosystem, with early adoption rates exceeding expectations [6]. - Intuit is making strides in the $89 billion mid-market total addressable market (TAM) through its Intuit Enterprise Suite and QuickBooks Online Advanced, with fourth-quarter billed customers nearly doubling compared to the third quarter [7]. Segment Performance - TurboTax Live revenues increased by 47% for the full fiscal year, with customer growth of 24%, while Credit Karma revenues rose by 32% [7][10]. - The Consumer Group's performance is enhancing year-round engagement and monetization opportunities beyond the tax season [10]. Challenges - Mailchimp is a drag on performance, with expectations for it to return to double-digit growth only by the end of fiscal year 2026 [12]. - International growth has lagged, limiting diversification, and Intuit's performance is tied to small-business health and consumer spending dynamics [12]. Valuation and Market Position - Intuit currently trades at a forward Price/Sales (P/S) ratio of 8.75X, which is above the industry average of 8.33X [13]. - Compared to peers, Intuit trades at a discount to Autodesk but at a premium to Commvault Systems [13]. Strategic Outlook - Intuit is positioned well for sustained growth due to its durable moats in tax, accounting, and consumer finance, alongside solid cash flow and manageable debt [14]. - Despite the recent pullback improving entry points, the stock's valuation premium and macro risks temper near-term upside, suggesting a prudent hold strategy until more favorable conditions arise [15].