Core Viewpoint - Intuit (INTU) stock presents a solid investment opportunity due to its high margins and discounted price, indicating strong pricing power and cash generation capacity [2] Financial Performance - INTU stock is currently 25% cheaper based on its Price-to-Sales (P/S) ratio compared to a year ago [3] - Recent increases in QuickBooks Online pricing and a shift to higher-value products demonstrate sustained pricing power, contributing to revenue growth [4] - Intuit anticipates ongoing double-digit revenue growth and increasing margins for fiscal 2026 [5] Fundamental Strength - INTU has strong fundamentals, with nearly 33.4% operating cash flow margin and 26.7% operating margin for the last twelve months [11] - Long-term profitability averages approximately 32.3% operating cash flow margin and 24.2% operating margin over the last three years [11] - Revenue growth for Intuit was 17.1% in the last twelve months and an average of 13.5% over the last three years [11] Valuation - INTU stock is available at a P/S multiple of 7.5, reflecting a 25% discount compared to a year ago [11] Investment Criteria - The company meets several investment criteria, including a market cap greater than $10 billion, high cash flow from operations margins, and a significant decrease in valuation over the past year [12]

January 22, 2026 Forward-looking statements This presentation contains forward-looking statements. There are a number of factors that could cause our results to differ materially from our expectations. Please see the section entitled "Cautions about forward-looking statements" in the Appendix accompanying this presentation for information regarding forward-looking statements and related risks and uncertainties. You can also learn more about these risks in our Form 10-K for fiscal 2025 and our other SEC fili ...

Company Performance - Adobe (ADBE) stock has decreased by 33.5% over the past 12 months, while Intuit (INTU) has declined by 13.2% [1] - Over the past five years, Adobe's stock has lost 38.5% of its value, with significant losses occurring between July 2025 and January 2026 [4] - The SPDR S&P 500 ETF (SPY) has had an annualized total return of 13.6% during the same period, highlighting Adobe's underperformance [4] Analyst Sentiment - Among 37 analysts covering Adobe, 20 currently rate it a Buy, a decrease from 25 three months ago, indicating a shift in sentiment [5] - The average 12-month target price for Adobe is $436.21, which is 50% above its current price, suggesting potential upside despite recent declines [5] Industry Outlook - Earnings for SaaS stocks in the S&P 500 are projected to grow by 14% this year, a decrease of 500 basis points from 2025, reflecting concerns about future growth [3] - Investor apprehension regarding the impact of artificial intelligence (AI) on SaaS companies is contributing to the negative sentiment surrounding stocks like Adobe and Intuit [2][6]

Core Insights - Intuit Inc. is a leading financial software and technology company with a market cap of $147.3 billion, known for products like QuickBooks, TurboTax, Credit Karma, and Mailchimp [1] Financial Performance Expectations - Analysts anticipate Intuit will report a profit of $2.21 per share for fiscal Q2 2026, reflecting a 6.8% increase from $2.07 per share in the same quarter last year [2] - For fiscal 2026, the expected profit is $17.23 per share, a 12.1% increase from $15.37 per share in fiscal 2025, with further growth projected to $19.68 per share in fiscal 2027, representing a 14.2% year-over-year increase [3] Stock Performance and Market Sentiment - Intuit's shares have declined by 12.4% over the past 52 weeks, underperforming the S&P 500 Index's 13.3% return and the Technology Select Sector SPDR Fund's 21.2% increase [4] - Recent stock performance has been negatively impacted by concerns over slowing growth, tougher year-over-year comparisons, analyst downgrades, and fears regarding AI-related disruptions in the software sector [6] Analyst Ratings - Wall Street analysts maintain a "Moderate Buy" rating for Intuit, with 19 out of 30 analysts recommending "Strong Buy," three suggesting "Moderate Buy," seven indicating "Hold," and one advising "Strong Sell" [7] - The mean price target for Intuit is $814.31, indicating a potential upside of 53.9% from current levels [7]

Core Viewpoint - The software sector is experiencing its worst start to the year since 2022, with a 15% decline following an 11% drop last year, raising concerns about future growth prospects due to emerging AI competition [1][3]. Group 1: Market Performance - A group of Software as a Service (SaaS) stocks tracked by Morgan Stanley has seen a significant downturn, marking the worst annual opening since 2022 [1]. - Intuit Inc., the parent company of TurboTax, experienced a 16% drop, while Adobe and Salesforce saw declines exceeding 11% [3]. - The Nasdaq 100 index is nearing historical highs, yet companies like ServiceNow Inc. are at multi-year lows, highlighting a widening gap in performance within the tech sector [9]. Group 2: AI Competition - The launch of Anthropic's AI collaboration tool "Claude Cowork" has intensified fears of disruptive competition in the software market, reminiscent of concerns from 2025 [3][8]. - Claude Cowork allows users to automate tasks such as creating spreadsheets and generating reports, significantly enhancing productivity for both programmers and non-programmers [4][6]. - The tool's rapid adoption has led to a notable increase in its user base, with a 12% rise in global daily active users since last month [7]. Group 3: Investor Sentiment - Many investors are losing confidence in holding software stocks, believing there are no catalysts for valuation recovery despite lower price multiples [8]. - Concerns about the attractiveness of AI products from established software companies are growing, as many have not demonstrated significant revenue impact from their AI offerings [9]. - The expected profit growth for software and services companies in the S&P 500 is projected to slow to 14% in 2026, down from an estimated 19% in 2025 [9]. Group 4: Valuation Trends - Software companies are seeing their valuations decline, with a forward price-to-earnings ratio of 18 times, the lowest in history compared to an average of over 55 times in the past decade [10]. - The traditional high valuation of software companies, based on subscription models and recurring revenue, is being challenged by the emergence of AI agents capable of performing tasks more efficiently [13].

Core Viewpoint - Intuit's stock price has significantly declined, indicating a persistent downward trend that began in July of the previous year [1] Group 1: Stock Performance - Intuit's stock price peaked at $810 and has fallen to a low of $545, representing a 32% decrease from its all-time high [1] - The company's market capitalization has decreased from $226 billion to $150 billion, resulting in the loss of billions of dollars in value [1]

Core Viewpoint - Intuit Inc. is considered a strong long-term investment, but recent downgrades and challenging comparisons for future growth have raised concerns about its near-term performance [1][3]. Group 1: Analyst Ratings and Price Targets - Wells Fargo downgraded Intuit to Equal Weight from Overweight with a reduced price target of $700, down from $840, citing tough comparisons for growth heading into 2026 [1]. - TD Cowen initiated coverage with a Buy rating and a price target of $802, expecting Intuit to exceed consensus expectations and arguing that AI-related risks are overstated [2]. - Truist also initiated coverage with a Buy rating and a price target of $739, emphasizing Intuit's strong market position and diverse fintech offerings [3]. Group 2: Company Overview and Market Position - Intuit provides a range of financial management, payments, compliance, and marketing products and services in the US, including well-known brands like TurboTax, Credit Karma, QuickBooks, and Mailchimp [3]. - Despite the potential of Intuit as an investment, some analysts believe that other AI stocks may offer greater upside potential with less downside risk [4].

Core Viewpoint - The release of Claude Code has reignited concerns about the disruption of the software industry by AI, leading to the worst annual start for U.S. software stocks in years, with a 15% decline in a basket of SaaS stocks tracked by Morgan Stanley since the beginning of the year [1][4]. Group 1: Market Performance - Software stocks have experienced a significant downturn, with a 15% drop since the start of the year, following an 11% decline in 2025, marking the worst opening performance since 2022 [1]. - Current valuations for software stocks are at a record low, trading at 18 times expected earnings for the next 12 months, significantly below the average of over 55 times in the past decade [1]. Group 2: Impact of AI Developments - The panic in the market was triggered by Anthropic's release of "Claude Cowork," which showcased capabilities that alarmed investors about the future of software companies [5][6]. - Users reported completing complex projects in a week that would typically take a year, highlighting the disruptive potential of AI tools [2]. Group 3: Analyst Perspectives - Many buy-side institutions believe there is currently "no reason to hold" software stocks due to the uncertainty brought by AI, with no catalysts for valuation recovery in the short term [4][6]. - Analysts note that existing software companies have not demonstrated significant appeal in their AI products, with Salesforce and Adobe showing limited revenue impact from their AI initiatives [8]. Group 4: Comparative Sector Performance - The earnings growth forecast for software and services companies in the S&P 500 is expected to slow from approximately 19% in 2025 to 14% in 2026, contrasting with the semiconductor sector, which is projected to see profit growth of nearly 45% in 2025 and accelerate to 59% in 2026 [8][9]. - Major tech companies like Microsoft, Amazon, Alphabet, and Meta Platforms are expected to invest heavily in AI infrastructure, providing clearer visibility for revenue growth compared to software firms [8]. Group 5: Valuation Discrepancies - Despite low valuations, there is a divide in market sentiment regarding the future of software stocks, with some analysts optimistic about a rebound by 2026 due to stable customer spending and attractive valuations [10][11]. - Concerns remain about how software companies will compete against AI agents capable of completing tasks rapidly, complicating the assessment of appropriate valuation multiples [11].

Core Viewpoint - The release of Claude Code has reignited concerns about the disruption of the software industry by AI, leading to a significant decline in U.S. software stocks, marking one of the worst starts to the year in recent history [1][5]. Group 1: Market Performance - Since the beginning of the year, a basket of SaaS stocks tracked by Morgan Stanley has dropped by 15%, following an 11% decline in 2025, marking the worst opening performance since 2022 [1]. - Software stocks are currently trading at a record low valuation of 18 times expected earnings for the next 12 months, significantly below the past decade's average of over 55 times [1]. - Companies like ServiceNow Inc. have seen their stock prices fall to multi-year lows, while Intuit Inc. experienced a 16% drop, the largest weekly decline since 2022 [2]. Group 2: Investor Sentiment - Many buy-side institutions believe there is "no reason to hold" software stocks amid the disruptive uncertainty brought by AI, with no visible catalysts for valuation recovery in the short term [4][6]. - The release of the "Claude Cowork" service by Anthropic has intensified fears among investors regarding the future growth prospects of software companies [5][6]. Group 3: AI Integration Challenges - Most software manufacturers have not demonstrated significant appeal in their AI products, with Salesforce and Adobe struggling to show revenue impact from their AI initiatives [7]. - Existing software companies need to exhibit accelerated growth to drive stock price rebounds, which appears unlikely in the short term [7]. - In contrast, other tech sectors, particularly semiconductor companies, are expected to see substantial profit growth, with projections of nearly 45% profit growth in 2025 and 59% in 2026 [7][8]. Group 4: Valuation Discrepancies - Despite low valuations, there remains a divide in market sentiment regarding the future of software stocks, with some analysts optimistic about a rebound by 2026 due to stable customer spending and attractive valuations [8]. - Barclays and Goldman Sachs predict that rising AI adoption will expand the total addressable market for software companies, potentially benefiting them in the long run [8]. - Wealthspire's chief market strategist notes that while the sector is not yet a clear buy opportunity, it is approaching a more attractive point for investment [9].

Core Viewpoint - The software sector in the U.S. stock market is experiencing its worst start in years, with a 15% decline in software-as-a-service stocks tracked by Morgan Stanley, contrary to earlier expectations of a 11% drop by 2025 [1][4]. Group 1: Market Performance - The stock prices of major software companies like Intuit, Adobe, and Salesforce have seen significant declines, with Intuit dropping 16%, Adobe and Salesforce both falling over 11% [1]. - Despite the Nasdaq 100 index nearing historical highs, companies like ServiceNow have reached multi-year lows, indicating a disconnect between overall market performance and software stock valuations [5]. Group 2: AI Innovations and Concerns - Anthropic's launch of the Claude Cowork service has raised concerns about disruptive innovations in AI, which could further impact software manufacturers' growth prospects [4]. - The rapid development of AI tools has created unprecedented uncertainty regarding future growth, as highlighted by investment managers [4]. Group 3: Earnings and Valuation Trends - Earnings growth for software and service companies in the S&P 500 is expected to slow to 14% in 2026, down from an anticipated 19% in 2025, contrasting with more optimistic fundamentals in other tech sectors [6]. - The price-to-earnings ratio for Morgan Stanley's software company portfolio has dropped to 18 times expected earnings, a historical low compared to an average of over 55 times in the past decade [6][7]. Group 4: Future Outlook - Some analysts believe that the current low valuations of software stocks could lead to a rebound by 2026, driven by stable customer spending and the potential benefits of AI [7][8]. - There is a cautious optimism about the software sector's attractiveness, although it is not yet deemed a definitive buy opportunity [8].