Intuit’s (NASDAQ:INTU) stock dropped over 12% last Thursday after the company lowered its guidance for fiscal 2013, making for its worst single-day performance in the past decade. Heck, volume was five times the average daily amount as investors ran for the exits.

On Friday, though, the stock gained back nearly 4% of those losses, bringing its 52-week return back into the black.

Which brings us to the obvious question: Should you buy Inuit shares? Here are three pros and three cons.

Pros

Small Business: Not only does Quickbooks — the primary brand for this segment, which holds over 90% of the small business accounting market — represent its biggest revenue generator, but it’s also the growth driver for the company. In the second quarter, small business revenue grew 16% year-over-year — representing 49% of its overall revenue — and it generated 59% of the company’s overall operating income. Management also reaffirmed its 2013 growth estimate of at least 15% — significantly higher than any of its four other segments. Plus, with just 5% of its total revenue outside the U.S., the potential opportunity, while evasive, is huge. One or two successful product launches outside the U.S. and this segment will grow exponentially.

Demandforce: Intuit acquired the marketing automation vendor for $423.5 million last spring. Founded in 2003, the company helps small businesses attract and retain customers through the use of social media, mobile communication and local marketing. Experts suggest that “front of the house” activities such as marketing and customer retention are the biggest needs for SMBs these days. QuickBooks’ 5 million desktop customers and 400,000 online are able to utilize Demandforce’s products and services to help build their businesses. Since its founding a decade ago, Demandforce has helped its customers generate $3 billion in additional revenue. According to Intuit, SMBs will spend $24 billion annually to acquire customers. Demandforce allows it to better meet the needs of its SMB audience.

Balance Sheet: Intuit’s net cash position at the end of the second quarter was $179 million. Its debt-to-capitalization ratio is 15%. Its credit facility calls for total debt that’s no more than three times EBITDA. At the end of Q2 it was $499 million and just 0.38 times EBITDA. In the past five years it’s grown free cash flow by approximately 20% annually to $1.1 billion. Theoretically it could borrow as much as $4 billion without upsetting its bankers. It won’t because it’s a fiscally conservative organization. But it could if the need arose. You don’t have to worry about it going out of business.

Cons

Turbo Tax: If you didn’t already know that Intuit was forecasting 8% to 10% revenue growth for its consumer tax segment in 2013 you would probably think 4% growth year-over-year was satisfactory. Alas, investors did know, punishing the company’s stock for its 50% cut in growth. Hurting the company this tax season was a 2% reduction in the number of IRS tax returns filed as more people required extensions this year. Looking at the company’s TurboTax numbers through April 16, it appears that the revenue per unit was smaller than expected in 2013. This combined with fewer tax returns in the IRS system and it’s easy to see why guidance was cut back. However, it’s difficult to understand why it set such a lofty goal in the first place.

Free Filing: Approximately 35% of Intuit’s $4.2 billion in fiscal 2012 revenue is from TurboTax. Intuit spends millions lobbying the federal government each year to ensure it retains its huge market share of online filing. Proponents of return-free filing suggest it would save taxpayers as much as $2 billion per year and 225 hours of preparation time by going to a pre-filled return supplied by the IRS based on information from your employer, etc. Already available in several European countries, not to mention from Intuit itself (through the Free File Alliance), the potential loss of this lucrative business would be devastating to both it and H&R Block (NYSE:HRB), which also offers online tax preparation. Personally, I can’t imagine Americans buying into this whole hog, but it’s definitely worth keeping an eye on.

International Expansion: There’s only one word to describe its international effort … pathetic. Just 5% of its overall revenue comes from outside the U.S. Like I said, that means the potential for growth  but it’s also a bit of a red flag that it’s a $4.5 billion company …. and can’t figure out how to generate more than $225 million annually from Canada and elsewhere. This, more than anything else about its business, is the reason why investors should think twice about investing in the company. We live in a technology-driven world that’s supposed to make globalization come alive and yet Joe Smith, a bus driver living in Amsterdam, is unable to use its products and services. What’s the point of the cloud if it only covers the U.S.?

Verdict

While there are several question marks about Intuit’s business model looking 10 years into the future, I don’t think they’re immediate enough to warrant concern. Be mindful, but don’t let that stop you from taking the plunge. Frankly, I don’t see its revised guidance as bad news. All of its segments are doing just fine including its consumer tax business.

Any problems with TurboTax’s future revenue is more than covered by its small business group. By helping SMBs generate revenue in addition to saving them costs, Intuit will always play an important role in this segment of the business community.

Yesterday’s $7 drop in its stock price is a rare opportunity to buy its stock at a discount. At $58 and change, you’re paying a fair price for a good company. The pros win this debate … easily!

As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.