Bleichmar Fonti & Auld LLP opened a securities fraud investigation into Intuit Inc. after the company's stock dropped more than 8% over the past month following the disclosure of pricing issues. The probe focuses on whether Intuit misled investors about its pricing strategy and growth outlook for its TurboTax and QuickBooks products.
Bleichmar Fonti & Auld LLP opened a securities fraud investigation into Intuit Inc. after the company's stock dropped more than 8% over the past month following the disclosure of pricing issues. The probe focuses on whether Intuit misled investors about its pricing strategy and growth outlook for its TurboTax and QuickBooks products.
Bleichmar Fonti & Auld LLP is investigating Intuit Inc. for securities fraud after its stock fell more than 8% on pricing concerns.
"Intuit investors that lost money after pricing issues were disclosed are notified to contact BFA Law about its securities fraud investigation," the firm said in a statement.
The investigation follows a period of intense scrutiny for the financial software company. Stifel downgraded Intuit from Buy to Hold on June 18, cutting its price target to $275 from $375, citing expectations that management will lower long-term growth targets for TurboTax and Global Business Solutions at the September analyst day. Citi maintained a Buy rating with a $591 price target on June 25, though the stock has continued to slide.
The probe adds regulatory risk to a stock already under pressure from slowing growth in its core tax and small-business segments. Intuit serves about 100 million customers through TurboTax, Credit Karma, QuickBooks and Mailchimp.
The law firm is seeking investors who suffered losses to come forward. The investigation centers on whether Intuit made false or misleading statements about its business and pricing strategy.
The stock's decline accelerated after Stifel's June 18 downgrade, which flagged concerns that Intuit's years of aggressive price hikes were giving way to value-based pricing that could compress margins. The firm projected TurboTax's growth target could fall to 4 percent to 6 percent from 6 percent to 10 percent, while Global Business Solutions growth may drop to 10 percent to 15 percent from 15 percent to 20 percent.
Despite the selloff, analysts remain broadly bullish. The 12-month average price target implies more than 62 percent upside from current levels, according to data compiled by Insider Monkey.
The investigation creates a new overhang for Intuit shares, which are already testing their lowest levels in months. Investors will watch for any further developments in the probe and the company's September analyst day, where management is expected to outline updated growth targets.
This article is for informational purposes only and does not constitute investment advice.
