Investing.com -- Goldman Sachs downgraded Intuit to Sell from Neutral on Tuesday and slashed its 12-month price target to $276 from $519, citing rising competitive threats to the company’s tax business that analysts warn could weigh on future results.

Analysts led by Gabriela Borges said they expect the shares to remain rangebound over the coming quarters as estimate revisions affect sentiment.

Shares fell more than 4% in premarket trading by 06:32 ET. The stock has already fallen roughly 46% year-to-date, against an S&P 500 gain of 11%.

The core of Goldman’s concern is TurboTax, which accounts for roughly 25% of Intuit’s revenue and operating income. The bank sees a new wave of AI-powered tax competitors — including Prime Meridian, Perplexity Tax, and Chime Tax — beginning to mature both in product capability and go-to-market strategy after largely relying on virality in their first season.

Goldman estimates the cost for AI models to process a typical individual tax return at just $0.12, compared to TurboTax’s blended average revenue per return of $162, arguing that new entrants can undercut incumbents without requiring significant venture subsidy.

"We see the potential for increased competition over the next 2 years," analysts led by Gabriela Borges wrote. "This will likely show up in lower market share or in lower average revenue per user (ARPU), albeit with some offset from positive mix shift into Assisted."

Goldman also flagged Intuit’s email marketing and automation platform Mailchimp, which represents about 7% of revenue, as a source of incremental pressure. The business had been targeted for double-digit exit-rate growth in fiscal 2026, but posted a slight year-over-year decline in the most recent quarter. Analysts expect further deceleration as Intuit right-sizes costs for a lower-growth profile.

"We think it may be challenging for Intuit to achieve its long-term financial targets, and Street estimates for the next 2 years that essentially reflect no deceleration in revenue growth rates," the analysts continued.

The bank’s fiscal 2028 GAAP EPS estimate of $28.55 sits 13% below Wall Street consensus. In a base-case scenario for TurboTax alone, Goldman models revenue roughly 18% below fiscal 2025 levels by 2030, assuming 20% of U.S. tax filers migrate to AI-only solutions.

On a more positive note, Intuit’s recent partnership with Anthropic, share-gain potential in the higher-ARPU assisted tax category, and a 17% workforce reduction announced in May could collectively protect earnings even in a slower-growth environment, the analysts noted.

"Intuit has a 20+ year history of adapting to technological change," they said.

The valuation was reset to 15 times GAAP earnings, a modest discount to software peers with comparable growth profiles, reflecting Goldman’s view that the long-term revenue growth algorithm has shifted from a 14% historical CAGR toward the 5-10% range.