01:00 PM EDT, 09/24/2024 (MT Newswires) -- (Updates with company response in the fifth to seventh paragraphs.)

Intuit's (INTU) shares carry a 40% to 80% potential downside risk amid poor disclosure practices and "questionable" M&A transactions, short seller Spruce Point Capital Management said Friday.

Spruce Point alleged that the company's small business and self-employed segment has become increasingly opaque with "a mish-mash of different revenue streams, all with different drivers, dynamics, and growth prospects" as competition and growth pressures pile.

Intuit could be making hundreds of millions in revenue from non-core businesses such as small business term loans and financial supplies, but it's difficult to tell since the company provides little details about these activities, Spruce Point added.

The short seller also criticized Intuit's acquisition of email service Mailchimp and personal finance platform Credit Karma, saying both transactions were overpriced, while Intuit's tax filing system, TurboTax, was flagged by regulators over alleged deceptive marketing practices, the short seller pointed out.

In response, Intuit said its "strong" fiscal 2024 performance reflects its "positive track record and transformation from a tax and accounting company to a global financial technology platform that's driving durable growth at scale."

"We grew full-year revenue 13%, demonstrating that our strategy centered on our five Big Bets are solving our customers' biggest problems and delivering on our mission to power prosperity around the world," it told MT Newswires.

The company said it will further discuss the strength of its business and growth strategy at its Sept. 26 Investor Day.

Price: 642.61, Change: +0.64, Percent Change: +0.10