INTUIT INC. (INTU) stock intrinsic value fair value estimate & owner earnings analysis

Intuit is best known for TurboTax (consumer tax preparation), but the larger and more important part of the business today is QuickBooks, its accounting, payments and payroll platform for small businesses, alongside Credit Karma (personal finance and lending marketplace, acquired December 2020) and Mailchimp (email marketing and customer relationship tools for small businesses, acquired November 2021). What ties these together is a subscription and services model with high customer retention, cross-selling opportunities across products, and increasing use of built-in AI ("Intuit Assist") to automate bookkeeping, tax prep and marketing tasks for small businesses and consumers. We measure the cash the business actually generates for owners — operating cash flow after removing stock-based compensation, working-capital swings, and the ongoing investment needed just to maintain the current business (as opposed to fund its growth). Over the last four fiscal years, which are the first four years the combined QuickBooks/Credit Karma/Mailchimp business has existed in its current form, that figure has run between roughly $9 and $15 per share, with a middle ("base case") value of about $10.70 per share. We use that figure, not the most recent year alone, as the starting point for our valuation, because a single year (especially the most recent) can be flattered or hurt by factors that don't repeat. One accounting judgment worth noting: the Credit Karma and Mailchimp acquisitions created large annual charges for amortizing acquired customer relationships and technology (several hundred million dollars a year). These charges are non-cash, so they don't reduce the cash the business generates, and we don't subtract them again. But the assets being amortized are real and will eventually stop contributing what they contribute today — so rather than pretend that value lasts forever, we've built that gradual fade into how fast we assume the business grows, especially in our more cautious case. Our base case assumes revenue and cash flow growth that starts in the low double digits and gradually slows toward the mid-single digits over ten years, roughly in line with a maturing, still-growing software business, before settling into a permanent 1% annual growth assumption beyond that. Discounting those cash flows at a 6% rate (close to the long-term government bond yield plus a small margin, with no company-specific risk adjustment — all the risk is expressed through the range between our cases) gives a base-case value of about $386 per share. Our bear case assumes the IRS's free "Direct File" tax-filing program expands and gradually erodes TurboTax's share of simple returns, Mailchimp's growth stalls out against strong competitors such as Klaviyo and HubSpot (meaning much of what Intuit paid for it doesn't pay off), and QuickBooks' push into larger mid-market customers proceeds more slowly than hoped, compressing margins along the way. Even so, Intuit remains a diversified, profitable, cash-generating business in this case — it is a setback, not a collapse. That produces a value of about $196 per share, roughly half our base case. Our bull case assumes Intuit's AI features become a genuine competitive edge that lifts customer retention, pricing and cross-selling across all four businesses, sustaining double-digit growth for longer than the base case assumes. That produces a value of about $559 per share. Putting these together, the margin-of-safety price sits at a meaningful discount to our base-case estimate, given the real (if not severe) downside risk in the bear case — we estimate the margin-of-safety price at around $257 per share. One item we could not fully reconcile from the filings: in fiscal 2020 and 2021, an independent build of cash flow from net income and non-cash charges runs a few percent away from reported operating cash flow. The likely explanation is loan origination and sale activity tied to Credit Karma's newly-acquired lending business, which doesn't separate cleanly in the standard reporting categories we used. The gap is small and doesn't affect the valuation above, which is anchored to more recent, fully-combined years.