Intuit Stock Nearly Halved While Its Operating Margin Kept Climbing

The part of the tax franchise that lost on price is a small slice of its addressable market, and the profit line kept widening anyway.

Intuit (INTU) trades at $367, a little over half the $694.29 high it set within the past year, after a tax season the company concedes fell short of its own expectations, and amid securities class actions alleging misstatements about the strength of its tax business. The figure arguing the other way is the operating margin: 27.5% over the trailing twelve months.

The Price Loss Sits Inside 12% Of TurboTax’s Addressable Market

The company says it lost on price with the most price-sensitive do-it-yourself filers earning under $50,000 a year, a group inside a DIY category it sizes at $5 billion, or 12% of TurboTax’s addressable market. The other 88% is the assisted category, where the filer buys a person as well as software, and that is where the mix is shifting: TurboTax Live was guided to reach 53% of total TurboTax revenue in fiscal 2026 on 36% growth, against 7% growth for TurboTax as a whole. The do-it-yourself side is still about 47% of what TurboTax collects today: the 12% is a share of the opportunity, not of sales. Nor is tax the whole company: Global Business Solutions revenue grew 15% in fiscal Q3 2026, and inside it online ecosystem revenue for QuickBooks Advanced and Intuit Enterprise Suite grew about 38%.

Three Straight Years Of Margin Gains, Through A Bad Season

Operating margin has risen in each of the last three years, from 21.6% to 23.9% to 25.7%, and to 27.5% on a trailing-twelve-month basis now. The top line did soften: growth ran above 17% in each of the three prior quarters before slowing to 10.4%. The margin still widened through the season that went wrong. Profitability that widens like that, on revenue that is still growing, is the property the Trefis High Quality Portfolio favors.

What The 17% Headcount Cut Is Meant To Buy

Intuit is reducing its full-time workforce by 17%, and the CFO has said the majority of the cost savings are expected to flow to the bottom line, alongside a commitment to annual earnings-per-share growth of at least the mid teens in the coming years. Fiscal 2026 guidance carried that shape: revenue growth of 13% to 14%, with GAAP earnings per share guided up about 16%. Earnings guided to outgrow sales is what keeps per-share value growing while the top line decelerates.

Cheap Against Its Own Decade, With Fewer Filers Expected

The company expected total IRS filers to fall by about 30 basis points over the season that ended in the spring, a gap of roughly 2 million units against expectations and the most significant industry-wide contraction since the post-COVID tax season. Revenue at Mailchimp, which management is rightsizing rather than growing, was down slightly year over year in fiscal Q3 2026. At 22.1 times trailing earnings, inside a ten-year range of 15.7 to 83.9, the price appears to give little credit for the earnings side. The shares have already recovered 20% over the past three months, so this is not an unnoticed name. Whether a fall this size is the discount or the warning is the question a dip-buying screen exists to sort, and it turns on whether the margin keeps climbing once the headcount cut lands.

The Margin Can Keep Climbing And The Stock Can Still Swing

Intuit’s earnings power has held up better than its share price, and nothing says the gap has to close on a schedule. Anyone who would rather not rest on one name can see how the Trefis High Quality Portfolio approaches the problem. That portfolio has a track record of outpacing the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.