Intuit Inc. (NASDAQ:INTU)

The Price to Operating Profit (P/OP) ratio exhibits three distinct phases: a prolonged period of valuation stability, a phase of aggressive multiple expansion, and a subsequent correction toward historical norms.

Valuation Stability (2005–2014)

Between 2005 and 2014, the P/OP ratio remained relatively compressed, generally fluctuating within a tight range between 13.11 and 18.25. During this interval, the growth in share price was closely aligned with the growth in operating profit per share, suggesting a consistent market valuation of the company's operational earnings.

Multiple Expansion (2015–2021)

A significant shift in valuation occurred starting in 2015, characterized by a sharp increase in the P/OP ratio to 31.60. This upward trajectory persisted through 2021, culminating in a peak ratio of 62.00. During this period, share price appreciation substantially outpaced the growth of operating profits per share, indicating a substantial increase in the premium investors were willing to pay for each dollar of operating profit.

Correction and Normalization (2022–2026)

From 2022 onward, a trend of multiple contraction is observed. Although operating profit per share continued to grow consistently—reaching a peak of 22.02 in 2026—the share price experienced a sharp decline in the final year of the sequence. This resulted in the P/OP ratio falling to 14.26 by September 2026, effectively returning the valuation to levels comparable to those seen in the 2005–2014 period.

The long-term trend reveals a cycle of extreme valuation volatility. While operational efficiency and profitability per share grew steadily over the two-decade span, the market's valuation of those profits fluctuated wildly, peaking in 2021 before returning to a historical baseline by 2026.