Intuit’s Cost-Cutting Overhaul Fails to Stem Selloff as TurboTax Users Stall

Intuit is fighting to regain its footing after a brutal stretch that has knocked more than half off its market value since January. The stock closed at €255.10 on Friday – its lowest level in a year – and the 30-day annualized volatility has surged past 80 percent, signaling deep uncertainty among investors.

The turmoil traces back to a disappointing fiscal third quarter. Revenue came in at $8.56 billion, up 10 percent from a year earlier but still short of analyst forecasts. The underlying problem is glaring: the number of paying TurboTax Online subscribers increased by just 2 percent during the latest tax season, as price-sensitive customers balked at higher-tier offerings. That sluggish growth in the company’s flagship product is forcing management to rethink its pricing strategy – and drawing the attention of plaintiffs’ lawyers.

Several law firms, including Pomerantz LLP, have launched investigations into possible securities fraud. The probes center on whether Intuit misled investors about its TurboTax pricing during the 2026 tax season, after the company acknowledged losing cost-conscious customers. The legal risk adds another layer to a story already dominated by competitive threats.

Goldman Sachs recently downgraded the stock to “Sell” and slashed its price target from $519 to $276. The bank’s analysts argue that consensus earnings estimates remain too optimistic given the intensifying competition. They point to two specific dangers: the free IRS Direct File program, which could erode Intuit’s consumer tax market share, and a wave of low-cost AI-powered tax tools – such as Perplexity Tax – that are attacking the company’s traditional stronghold.

Should investors sell immediately? Or is it worth buying Intuit?

The company is responding with aggressive restructuring. Intuit will cut 17 percent of its global workforce, roughly 3,000 jobs, and expects to book $300 million to $340 million in one-time charges. At the same time, it is pouring resources into embedding AI features across QuickBooks and Mailchimp, while CFO Sandeep Aujla prepares to unveil details of the new “Intuit Enterprise Suite” at investor conferences in June.

Shareholders are getting a small olive branch: the quarterly dividend will rise 15 percent to $1.20 per share in July. But the payout offers scant comfort given the scale of the selloff. The stock now trades about 63 percent below its 52-week high of $706.80 set in July 2025, with a relative strength index of 36.7 flirting with oversold territory.

There is at least one bright spot. QuickBooks Online posted 24 percent revenue growth in the quarter, suggesting the company’s small-business ecosystem still has momentum. Whether that can offset the drag from TurboTax will become clearer in late August, when Intuit releases its next earnings report. For now, the bears have the upper hand, and the legal and competitive risks are keeping any recovery firmly in question.