Intuit Stock Underperforms S&P 500 by 21% This Year

Intuit Inc. shares have significantly underperformed the broader market this year, declining approximately 9% year-to-date. Finance.yahoo.com reported the underperformance on 30 May 2026. This compares to a 12% gain for the S&P 500 over the same period, creating a performance gap of over 21 percentage points. The software giant's market capitalization has fallen from a recent peak near $185 billion to around $168 billion.

Context — why this matters now

Intuit's underperformance arrives during a period of sustained growth for major software and cloud computing peers. The Nasdaq-100 Technology Sector index is up over 15% for the year. The current macro backdrop features a stable Federal Funds rate around 4.75%, with investors favoring growth stocks demonstrating clear AI monetization and resilient revenue expansion.

The catalyst for Intuit's specific weakness is two-fold. First, heightened competitive pressure in the small business software segment has intensified. New entrants and scaled rivals are challenging QuickBooks' market dominance with aggressive pricing and integrated platforms. Second, concerns over the growth trajectory of its consumer tax business, TurboTax, have surfaced following several states' adoption of free, direct-file systems which could erode its customer base over time.

This situation echoes challenges faced by other mature software leaders when growth plateaus. Adobe Inc. experienced a similar period of underperformance in 2022, when its stock fell 41% against a 19% decline for the S&P 500, driven by concerns over Figma acquisition costs and creative software saturation.

Data — what the numbers show

Intuit's stock closed at $604.20 on 29 May 2026. The stock is trading 32% below its 52-week high of $890.45, set in July 2025. By comparison, the S&P 500 is only 3% below its own record high. Intuit's forward price-to-earnings ratio has compressed to 28x, down from a five-year average of 42x and now sits closer to the sector median of 26x.

The magnitude of the decline is clear in a peer comparison. While Intuit is down 9% YTD, fellow financial technology firm Block Inc. is up 5%. Accounting software competitor Freshworks has gained 8%. The broader tech-heavy Invesco QQQ Trust is up 14% for the year.

Intuit's revenue growth guidance for fiscal 2026 sits between 10% and 12%, a deceleration from the 14% growth reported in fiscal 2024. Operating margins are projected to be between 38% and 39%, consistent with prior years but lacking the expansion investors seek in a high-rate environment.

Analysis — what it means for markets / sectors / tickers

The underperformance signals a sector rotation within software, where capital flows away from perceived legacy cash cows toward newer AI-centric platforms. Direct beneficiaries include enterprise AI infrastructure providers like Nvidia and cloud database firms like Snowflake, which have seen inflows. Intuit's weakness also highlights a specific risk for high-multiple stocks whose growth is questioned; it pressures the valuation of similar large-cap application software peers like Salesforce and Adobe.

A key counter-argument is Intuit's immense profitability and entrenched market position. The company generates over $4 billion in annual free cash flow and maintains a net cash position. Its small business ecosystem creates significant customer switching costs, which could defend its core revenue. The bear case may overestimate the immediate threat from state tax filing initiatives, which currently handle a tiny fraction of total returns.

Positioning data shows hedge funds have increased short interest in INTU to 2.5% of float, up from 1.8% at the start of the year. Meanwhile, long-only institutional ownership has dipped slightly, from 87% to 85%, indicating some large-scale profit-taking or portfolio rebalancing away from the name.

Outlook — what to watch next

The primary catalyst is Intuit's Q4 and full-year fiscal 2026 earnings report, scheduled for 21 August 2026. Analysts will scrutinize management's guidance for fiscal 2027, particularly for the Small Business and Self-Employed segment. Any deviation from the expected 10-12% revenue growth range will trigger significant volatility.

Investors should monitor the 50-day simple moving average, currently at $635, as a near-term resistance level. A sustained break above this level could signal a momentum shift. Conversely, the $580 level, which provided support in April 2026, is a critical level to watch on the downside. A break below $580 could open the path to the $520 support zone.

The next Federal Open Market Committee meeting on 17 September 2026 will also be pivotal. A dovish pivot that lowers long-term rate expectations could benefit high-multiple growth stocks like Intuit by improving their discounted cash flow valuations. Continued restrictive policy would maintain pressure.

Frequently Asked Questions

What does Intuit's underperformance mean for a long-term investor?

For a long-term investor, periods of underperformance can present entry points if the core investment thesis remains intact. The key question is whether competitive threats are structural or cyclical. Intuit's dominance in small business accounting and DIY tax preparation has historically been durable, but investors must assess if new free tax filing options and competing platforms represent a permanent shift. The company's continued investment in AI, via its Intuit Assist platform, aims to defend its moat.

How does Intuit's current valuation compare to its historical average?

Intuit's valuation has contracted meaningfully. Its forward P/E of 28x is a 33% discount to its five-year average of 42x. The stock's price-to-sales ratio of 8.5x is also below its 10-year average of 10x. This compression reflects the market's lowered growth expectations. While cheaper, the valuation is not yet in deep value territory compared to the broader market's 21x forward P/E, suggesting expectations, while lowered, still incorporate a premium for its quality and margins.

Has Intuit underperformed the S&P 500 over longer time horizons?

No, over longer horizons Intuit has dramatically outperformed. Over the past five years, Intuit stock has delivered a total return of approximately 95%, compared to the S&P 500's 75% return. Over the past decade, the outperformance is even more pronounced, with Intuit gaining over 550% against the index's 185%. The current year's underperformance is a sharp reversal of a long-term trend, making its persistence a critical focus for analysts reviewing long-term software investing trends.

Bottom Line

Intuit's significant underperformance reflects legitimate investor concerns over growth deceleration and competitive risks, outweighing its still-strong profitability.