Intuit Inc.INTUNASDAQ

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $606.27 per share(market-calibrated)

+44.7%

Upside to Fair Value

Current

$419.06

Pure Model

$611.39

Fair Value

$606.27

Bull Case

$851.76

Bear Case

$424.37

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

2.90%

Calibrated Growth

3.54%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $611.39.

What's Driving This Ratingfor INTU

✓

CapEx already efficient

CapEx at 1.05% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 28.37% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

↑

Strong near-term revenue growth

Analyst consensus projects 12.68% revenue growth in Year 1, fading to 11.26% by Year 5 and 3.75% by Year 10. Revenue reaches $47.5B by Year 10 (vs $18.8B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $456.26/share (17.1x terminal FCF) while exit multiple gives $766.52/share (35.5x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

✓

Model and market roughly agree

Market-implied terminal growth of 2.90% is close to the model's 3.75% (only 85bps apart). The DCF assumptions are well-aligned with how the market is pricing this stock.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 78.81% indicates efficient cash generation. FCF reaches $12.0B by Year 10 (25.30% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.28

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)10.27%

Cost of Debt

Pre-tax Cost of Debt2.55%

Tax Rate19.96%

After-tax Cost of Debt2.04%

Equity Weight (E/V)94.64%

Debt Weight (D/V)5.36%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (94.64% × 10.27%) + (5.36% × 2.04%)

= 9.83%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$21.2B	$26.8B	$34.3B	$40.8B	$47.5B
EBIT	$6.0B	$7.6B	$9.7B	$11.6B	$13.5B
Tax	$1.2B	$1.5B	$1.9B	$2.3B	$2.7B
NOPAT	$4.8B	$6.1B	$7.8B	$9.3B	$10.8B
+ Depreciation	$792M	$999M	$1.3B	$1.5B	$1.8B
- Capex	$223M	$281M	$360M	$428M	$498M
- Δ NWC	$59M	$73M	$86M	$77M	$43M
Free Cash Flow	$5.3B	$6.7B	$8.6B	$10.3B	$12.0B
Discount Factor	0.911	0.755	0.626	0.519	0.392
Present Value	$4.9B	$5.1B	$5.4B	$5.3B	$4.7B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$12.0B

Terminal Growth Rate3.75%

WACC9.83%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$205.1B

PV of Terminal Value$80.3B

Exit Multiple Method

Year 10 EBITDA$15.2B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$427.0B

PV of Terminal Value$167.2B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$51.2B

PV of Terminal Value$80.3B

Enterprise Value$131.5B

(-) Net Debt$3.8B

Equity Value$127.8B

Shares Outstanding280M

Price per Share$456.26

Exit Multiple Method

PV of Projected FCFs$51.2B

PV of Terminal Value$167.2B

Enterprise Value$218.4B

(-) Net Debt$3.8B

Equity Value$214.6B

Shares Outstanding280M

Price per Share$766.52

Pure Model Fair Value

$611.39

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
7.83%	$752.21	$775.63	$804.79	$842.09	$891.52
8.83%	$661.70	$676.47	$694.16	$715.71	$742.54
9.83%	$589.94	$599.85	$611.39	$625.00	$641.29
10.83%	$530.88	$537.83	$545.76	$554.89	$565.53
11.83%	$481.02	$486.06	$491.72	$498.13	$505.44

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$424.37

1.3% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.60

Base Case

$611.39

45.9% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 1.28

Bull Case

$851.76

103.3% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 1.09

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth12.68%

Year 3 Revenue Growth12.27%

Year 5 Revenue Growth11.26%

Year 7 Revenue Growth8.26%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin28.37%

Tax Rate19.96%

Historical Capex / Rev1.05%

NWC / Revenue2.48%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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