Intuit Inc.'s INTU latest tax season highlights a major shift in its TurboTax business. While TurboTax Live continues to post impressive growth, the company's lower-priced DIY tax products lost customers as price-sensitive filers turned to competing options.
The standout performer was TurboTax Live, Intuit's assisted tax offering that combines AI-powered tools with access to human tax experts. The company expects TurboTax Live revenues to climb 36% to nearly $2.8 billion in fiscal 2026, with customer growth of 38%. Live is also projected to account for about 53% of total TurboTax revenues, underscoring how assisted tax preparation has become the company's primary growth engine.
However, the picture is less encouraging for DIY tax filing. Intuit expects total TurboTax Online units to decline about 2% after admitting it "lost on price" among customers earning less than $50,000 annually. Management acknowledged that its pricing strategy was not competitive enough for budget-conscious users, leading to lower e-file market share and fewer free users entering the TurboTax ecosystem.
To address the weakness, Intuit plans to introduce more competitive pricing and simpler product options for basic tax filers. At the same time, it aims to generate more value through Credit Karma, refund products and other financial services rather than relying solely on tax-preparation fees. Customers using both TurboTax and Credit Karma already generate about 30% more revenues, giving Intuit a strong incentive to rebuild its DIY user base while continuing to expand its higher-margin assisted tax business.
How Are Intuit’s Competitors Faring?
H&R Block HRB reported third-quarter fiscal 2026 revenues of $2.4 billion, up 5.3% year over year, driven by higher pricing and volume in U.S. assisted tax preparation. Its assisted-channel market share improved for a third consecutive year, while net income increased 17.4%, indicating healthy demand for expert-led filing services and support.
Paychex’s PAYX tax-related business, included in its Management Solutions segment (payroll processing, tax filing and compliance), delivered strong momentum in third-quarter fiscal 2026, with revenues rising 23% year over year to $1.4 billion. Growth was driven by higher client volumes, increased revenue per client and sustained demand for payroll tax compliance services, supported by the Paycor acquisition.
INTU’s Price Performance, Valuation and Estimates
Shares of Intuit have risen 12.9% over the past month, outperforming both the broader industry and the S&P 500 composite.
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In terms of forward 12-month Price/Sales (P/S), Intuit is currently trading at 3.35X, which is at a discount to the industry average of 5.18X.
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Intuit’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for fiscal 2026 EPS has been revised upward by a cent over the past month. The consensus mark for 2026 calls for 18.4% growth year over year.
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Currently, Intuit carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).