INTU

We rate INTUIT INC. (INTU) as a Reduce with a composite score of 44.9/100 at a current price of $357.07. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (67th percentile) and quality (49th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (37th percentile) and momentum (38th percentile) tempers our overall conviction. We assign a Narrow Moat rating (60/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

INTUIT INC. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 44.9/100 places it at rank #2826 in our full 7,333-stock universe. With a $186.1B market capitalization, INTUIT INC. operates at meaningful scale within the Services sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue contraction of -42% combined with momentum at the 38th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 78% (+18.8pp vs sector) narrow to operating margins of 21% (+17.7pp vs sector) and net margins of 16.4%, yielding a gross-to-net conversion rate of 21%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $357.07, INTUIT INC. is trading near fair value based on current fundamentals. Our value factor score of 45/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 26.9x (roughly in line with the sector median of 23.7x), EV/EBITDA of 21.9x (at a premium), P/B of 5.5x, P/S of 5.6x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to INTUIT INC.. The company exhibits strong financial stability with a beta of 0.95, conservative leverage (32% D/E), and a stability factor in the 67th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 67th percentile with quality at the 49th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 78% provide a buffer against cost pressures; above-average stability (67th percentile) suggests predictable business dynamics; large-cap scale ($186.1B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate INTUIT INC.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 20.4%, disciplined leverage (32% D/E), best-in-class net margins of 16.4%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — INTUIT INC. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 0.65% dividend yield, and the combination of 11.8% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, INTUIT INC. receives a Reduce rating with a composite score of 44.9/100 (rank #2826 of 7,333). Our quantitative framework assigns a Narrow Moat (60/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 47/100.

Our analysis does not support a constructive view on INTUIT INC. at this time. The combination of the current quantitative profile, low uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.