Intuit stock fell Friday despite the financial software firm beating estimates for its fiscal fourth quarter and guiding higher than views for the year ahead. Investors appeared to focus on the company's current-quarter guidance, which missed estimates because of an accounting change. Intuit also disappointed with its long-term growth targets.
On the stock market today, Intuit stock sank 6.8% to close at 619.85.
The Mountain View, Calif.-based company announced fiscal Q4 results and guidance late Thursday. Its results and full-year outlook came in above estimates.
However, for the current quarter ending Oct. 31, Intuit forecast adjusted earnings of $2.36 a share on sales of $3.13 billion, based on the midpoint of its guidance. Analysts had been looking for earnings of $2.78 a share on sales of $3.37 billion in the fiscal first quarter.
Accounting Change Muddies Outlook
An accounting change at Intuit caused a disconnect between analyst estimates and company guidance in the first quarter. Intuit's shift to a subscription business model for QuickBooks changed the timing of how it recognizes revenue from the segment.
The accounting changes will lower revenue in the first quarter by about $160 million, Intuit said. That includes about $50 million that was recognized in the first three quarters of fiscal 2024, $60 million recognized in the fourth quarter of fiscal 2024, and $50 million expected to shift from the first quarter of fiscal 2025 to later quarters in fiscal 2025.
In addition, Intuit adjusted its long-term growth ranges for each business segment ahead of its Sept. 26 analyst day.
"The biggest surprise for investors was likely a lowering of the Consumer target from 8-12% to 6-10% growth," Morgan Stanley analyst Keith Weiss said in a client note. He rates Intuit stock as equal-weight with a price target of 685.
Intuit offers tax preparation software and other tools for individuals and small businesses to manage finances. Its products include TurboTax, QuickBooks, Credit Karma and Mailchimp.
Intuit stock is on the IBD Tech Leaders list.
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