Fitz and Starts: AI & Enterprise Software Weekly - Kimi K3, Updated Preferences

Research evidence excerpt

Fitz and Starts: AI & Enterprise Software Weekly - Kimi K3, Updated Preferences

ne is growing 20%+ (GBSG segment

majority of rev), 2) The upsell motion to assisted tax offerings can more than offset elevated

TurboTax DIY churn, and 3) the multiple likely already reflects headwinds ahead. However,

we still see risk to the downside given: 1) needed pricing/packaging changes for TurboTax

low-end DIY filers could constrain aggregate TurboTax growth, 2) consensus estimates do

not seem to reflect Desktop rev declines or flattish Mailchimp growth in FY27, 3) potential for

downside to LT target growth ranges. Unfortunately, INTU's Super Bowl is tax season (which

is once a year), and we believe INTU under-delivering in the most recent F3Q26 qtr means

it could be in the penalty box until next tax season. Assume at UW and a $250 PT." See our

full initiation: here.

Post-Assumption. Over the course of the week, we had a number of ◦Feedback

conversations on our INTU UW rating. Pushback centered on how the potential

headwinds cited are likely priced into the stock at the current valuation and that our

focus on the TurboTax DIY weakness is potentially misguided given TurboTax Live is

more than 50% of the mix (we estimate TurboTax DIY is only 12% of FY26 total rev).

We acknowledged both these things early on in our assumption. We also had a number

of conversations with investors who agreed with the rationale behind the rating, that

management lost some credibility with underdelivering on TurboTax in the F3Q and that

they will not be given the benefit of the doubt as we progress towards F3Q27. To be

clear, we think INTU mgmt did see strong filing data going into F3Q and was likely caught

flatfooted at qtr end. We also want to underscore, INTU as a business will likely be around