Intuit Inc.
An Intuitvely Taxing Valuation
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Research Overview

INDEX:
S&P 500
Sector:
Technology
Position:
Short
Date:
Sep 20, 2024

After conducting a forensic financial review of Intuit Inc. (Nasdaq: INTU), a global financial technology platform, Spruce Point raises concerns about the underlying trends in its core franchises, questionable large M&A transactions, credibility and transparency of accounting and financial reporting, consumer-unfriendly behavior and sustainability of its current premium valuation. Based on our investigation, we estimate a 40% - 80% potential long-term downside and market underperformance risk.

The report highlights several key concerns with the Company, including:

  • We find Intuit’s Small Business & Self-Employed segment has become increasingly opaque as competitive threats and growth pressures mount
  • Our opinion that Intuit dramatically overpaid for the Mailchimp and Credit Karma acquisitions and that both businesses should detract from Intuit's value
  • Concerns that Intuit’s TurboTax business is threatened by anti-consumer behavior, questionable disclosures, unsettling trends, and growing existential risk
  • Our belief that AI is doing little for Intuit, despite its frequent promotion, including re-branding the entire Company as an “AI-enabled expert platform”
  • Intuit’s ever-changing segment reporting practices and other accounting distortions maybe allowing it to embellish its profitability
  • Our view that Intuit is one of the most overvalued large technology companies in the public markets, and multiple valuation methodologies yield substantial long-term downside risk
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