Intuit Inc. INTU is revamping its do-it-yourself (DIY) tax preparation strategy to regain market share amid growing competition from lower-cost providers. The company is prioritizing customer acquisition over near-term revenue per customer, a shift that could moderate TurboTax revenue growth in fiscal 2027.
In fiscal 2026, total U.S. TurboTax units declined 2% year over year to 39 million, while online units fell 2% to 34.9 million. Intuit also lost 3 percentage points of its DIY tax e-file share. Management acknowledged that pricing had become the primary reason customers left TurboTax, prompting plans to offer more competitive entry-level pricing and improve affordability.
At its September 2026 Investor Day, Intuit outlined plans to expand Credit Karma Tax, targeting free federal tax filing and $15 state filing. The strategy aims to attract price-sensitive customers while preserving TurboTax's premium positioning through AI-powered tax preparation, expert assistance and differentiated services.
However, lower average revenue per customer could weigh on near-term growth. Management expects TurboTax revenues to increase 2-3% in fiscal 2027, down from 7% in fiscal 2026. TurboTax Live revenue growth is also expected to moderate to the mid-teens from 37% in the prior year, reflecting slower upgrades from DIY customers.
The strategy offers long-term opportunities. Customers using both TurboTax and Credit Karma generate approximately twice the average revenue per customer of single-product users. Intuit's ability to regain market share, attract new filers and cross-sell higher-value services will be crucial to offsetting near-term pricing pressure and sustaining growth.
How Are INTU’s Competitors Faring?
H&R Block HRB, a direct competitor to Intuit's TurboTax, reported fourth-quarter fiscal 2026 revenues of $1.14 billion, up 3% year over year. However, DIY tax preparation revenues declined 2.2% to $148.8 million, highlighting pricing and demand challenges in the segment. Adjusted EPS increased to $2.38 from $2.27.
Thomson Reuters TRI, a competitor in professional tax and accounting software, reported second-quarter 2026 revenues of $1.95 billion, up 9.5% year over year. Its Tax, Audit & Accounting Professionals segment revenues rose 14% to $311 million, reflecting sustained demand for professional tax solutions.
INTU’s Price Performance, Valuation and Estimates
Shares of Intuit have gained 7.8% over the past three months, underperforming the broader industry but outperforming the S&P 500 composite.
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In terms of forward 12-month Price/Sales (P/S), Intuit is currently trading at 3.38X, which is at a discount to the industry average of 6.51X.
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Intuit’s estimate revisions reflect a negative trend. The Zacks Consensus Estimate for fiscal 2027 EPS has been revised upward by a cent to $23.50 over the past week. The consensus estimate for 2027 calls for a year-over-year decline of 3.2%.
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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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