Intuit earnings put Morgan Stanley stock forecast to the test

Intuit’s latest earnings report gave investors fresh evidence for the bull case Morgan Stanley laid out before the company’s fiscal third-quarter results, while also leaving some of Wall Street’s biggest concerns around TurboTax and artificial intelligence unresolved.

The company reported fiscal third-quarter revenue of $8.56 billion, up 10% from a year earlier, while GAAP diluted earnings per share rose 11% to $11.09. Non-GAAP diluted earnings per share climbed 10% to $12.80, as Consumer revenue increased 8% and Global Business Solutions revenue rose 15%.

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Those results landed after Morgan Stanley framed the quarter as a key test for Intuit. In a note given to TheStreet by Morgan Stanley, analyst Keith Weiss kept an Overweight rating on Intuit, named it a Top Pick in large-cap software, and set a $580 price target on the stock. The note said shares had fallen about 40% year to date before the report and traded at 19 times calendar 2027 GAAP EPS, creating what Morgan Stanley viewed as a favorable risk-reward setup.

Intuit raised its full-year fiscal 2026 revenue outlook to a range of $21.34 billion to $21.37 billion, representing growth of about 13% to 14%. It also raised its outlook for non-GAAP operating income and non-GAAP EPS, with the company now expecting non-GAAP EPS of $23.80 to $23.85.

TurboTax still carries the debate

In the quarter, Intuit said Consumer revenue rose to $5.3 billion, while TurboTax revenue grew 7% to $4.4 billion. Credit Karma revenue increased 15% to $631 million, driven by strength in personal loans, auto insurance, and home loans, while ProTax revenue was flat from the prior year.

The company’s full-year tax guidance showed both the strength and the pressure in the business. Intuit expects TurboTax Live revenue to grow 36% to $2.8 billion and represent about 53% of total TurboTax revenue, with TurboTax Live customers expected to grow 38%. At the same time, the company expects total TurboTax Online units to decline about 2%, TurboTax share of e-files to decline about 1 point, and pay-nothing customers to fall to roughly 7 million from 8 million last year.

The note said investors were worried that lower-cost tax options and AI-native entrants could pressure TurboTax units and average revenue per customer, especially among simple DIY filers. Morgan Stanley argued TurboTax still has advantages in consumer trust, prior-year continuity, tax-form imports, integrated filing workflows, refund visibility, and access to expert help when returns become more complex.