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The company anticipates revenues between $1.475 billion and $1.49 billion for the fiscal second quarter. The Zacks Consensus Estimate for the same is pegged at $1.48 billion, suggesting growth of 10.2% from the year-ago quarter.
Autodesk projects non-GAAP earnings in the band of $1.98-$2.04 per share. The Zacks Consensus Estimate for the same is pegged at $2 per share, unchanged over the past 30 days. The figure indicates a 4.71% year-over-year rise.
Image Source: Zacks Investment Research
In the last reported quarter, Autodesk delivered an earnings surprise of 5.06%. Markedly, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.83%.
Our proven model does not conclusively predict an earnings beat for Autodesk this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Shape Autodesk’s Upcoming Results
The company's fiscal second-quarter performance is expected to have benefited from strong growth in subscription revenues. The Zacks Consensus Estimate for subscription revenues is pegged at $1.4 billion, indicating growth of 10.6% year over year.
This growth is attributed to the increasing trend of cloud migration, which is being accelerated by the ongoing digital transformation across various industries. The demand for Autodesk's cloud solutions is being propelled by this broader trend.
A solid uptick in the maintenance-to-subscription program, continued momentum in new customer billings and steady renewals are expected to have acted as tailwinds.
The robust adoption of the AutoCAD and AutoCAD LT product family is anticipated to have favored ADSK's top line. AutoCAD and AutoCAD LT are flagship products within Autodesk's portfolio, which is widely used in various industries for computer-aided design purposes. The Zacks Consensus Estimate for the AutoCAD and AutoCAD LT product family’s fiscal second-quarter revenues is pegged at $391 million.
The company is likely to have gained from the robust performance of the Enterprise Business Agreements program. This is anticipated to have boosted Autodesk’s remaining performance obligation growth rates in the quarter to be reported.
Gains from Autodesk Build, a field management solution and part of the Autodesk Construction Cloud, are expected to have contributed to the to-be-reported quarter's top line as the company has been witnessing steady traction with owners, general contractors and subcontractors across the construction industry.
The Zacks Consensus Estimate for the Media & Entertainment, Manufacturing and Other product family’s fiscal second-quarter revenues is pegged at $74 million, $271 million and $21.79 million, respectively.
However, inflationary pressure, foreign exchange movements and macroeconomic headwinds might have negatively impacted ADSK’s fiscal second-quarter performance.
Price Performance & Valuation
Autodesk has seen its stock price climb 5.2% year to date, underperforming the broader Zacks Computer and Technology sector’s rise of 22.2%. This modest gain came amid a challenging macroeconomic environment, raising questions about the company's future trajectory and what investors can expect moving forward.
The company's resilience can be attributed to its strong market position and successful transition to a subscription-based model. This shift has resulted in more predictable cash flows and potentially higher lifetime customer value. The subscription model has helped Autodesk weather economic fluctuations more effectively, as recurring revenues provide a buffer against short-term market volatility.
Autodesk aims to capitalize on its position as a market leader in the CAD market by investing in generative AI to enhance its customer base. Autodesk AutoCAD has the highest market share of 31%, followed by Dassault SolidWorks with 12%, Dassault Systemes (DASTY - Free Report) with 10%, and ANSYS (ANSS - Free Report) and PTC (PTC - Free Report) with less than 5%, according to a report by PSH.
As the company continues to execute its long-term strategy and adapt to changing market conditions, investors will be weighing the potential for future growth against the current valuation.
Autodesk is trading at a premium with a trailing 12-month EV/EBITDA of 37.08X compared with the Zacks Computer - Software industry’s 18.41X, reflecting a stretched valuation.
ADSK’s EV/EBITDA TTM Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Considerations: Balancing Risk and Reward
Autodesk presents a compelling investment opportunity. The company's dominant position in computer-aided design (CAD) software for architecture, engineering and manufacturing industries provides a strong competitive moat. Autodesk's transition to a subscription-based model has improved revenue predictability and customer retention. The increasing adoption of Building Information Modeling (BIM) and digital transformation across industries drives demand for Autodesk's solutions. With emerging technologies like generative design and cloud-based collaboration tools, Autodesk is well-positioned for long-term growth. However, economic cycles affecting the construction and manufacturing sectors pose potential risks to the company's performance.
Conclusion
The company's strong market position, successful transition to cloud-based solutions, and strategic focus on sustainability and emerging technologies like generative design, digital twins, and BIM position it well for future success. Risk-averse investors or those with a shorter investment horizon may want to exercise caution and wait for a better entry point, given the uncertainties surrounding the company's ability to maintain high growth rates in a maturing market. Autodesk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Autodesk Stock Before Q2 Earnings: To Buy or Not to Buy?
Autodesk (ADSK - Free Report) , a leader in 3D design software, is scheduled to report second-quarter fiscal 2025 results on Aug. 29.
The company anticipates revenues between $1.475 billion and $1.49 billion for the fiscal second quarter. The Zacks Consensus Estimate for the same is pegged at $1.48 billion, suggesting growth of 10.2% from the year-ago quarter.
Autodesk projects non-GAAP earnings in the band of $1.98-$2.04 per share. The Zacks Consensus Estimate for the same is pegged at $2 per share, unchanged over the past 30 days. The figure indicates a 4.71% year-over-year rise.
Image Source: Zacks Investment Research
In the last reported quarter, Autodesk delivered an earnings surprise of 5.06%. Markedly, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.83%.
Autodesk, Inc. Price and EPS Surprise
Autodesk, Inc. price-eps-surprise | Autodesk, Inc. Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Autodesk this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Autodesk has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Shape Autodesk’s Upcoming Results
The company's fiscal second-quarter performance is expected to have benefited from strong growth in subscription revenues. The Zacks Consensus Estimate for subscription revenues is pegged at $1.4 billion, indicating growth of 10.6% year over year.
This growth is attributed to the increasing trend of cloud migration, which is being accelerated by the ongoing digital transformation across various industries. The demand for Autodesk's cloud solutions is being propelled by this broader trend.
A solid uptick in the maintenance-to-subscription program, continued momentum in new customer billings and steady renewals are expected to have acted as tailwinds.
The robust adoption of the AutoCAD and AutoCAD LT product family is anticipated to have favored ADSK's top line. AutoCAD and AutoCAD LT are flagship products within Autodesk's portfolio, which is widely used in various industries for computer-aided design purposes. The Zacks Consensus Estimate for the AutoCAD and AutoCAD LT product family’s fiscal second-quarter revenues is pegged at $391 million.
The company is likely to have gained from the robust performance of the Enterprise Business Agreements program. This is anticipated to have boosted Autodesk’s remaining performance obligation growth rates in the quarter to be reported.
Gains from Autodesk Build, a field management solution and part of the Autodesk Construction Cloud, are expected to have contributed to the to-be-reported quarter's top line as the company has been witnessing steady traction with owners, general contractors and subcontractors across the construction industry.
The Zacks Consensus Estimate for the Media & Entertainment, Manufacturing and Other product family’s fiscal second-quarter revenues is pegged at $74 million, $271 million and $21.79 million, respectively.
However, inflationary pressure, foreign exchange movements and macroeconomic headwinds might have negatively impacted ADSK’s fiscal second-quarter performance.
Price Performance & Valuation
Autodesk has seen its stock price climb 5.2% year to date, underperforming the broader Zacks Computer and Technology sector’s rise of 22.2%. This modest gain came amid a challenging macroeconomic environment, raising questions about the company's future trajectory and what investors can expect moving forward.
The company's resilience can be attributed to its strong market position and successful transition to a subscription-based model. This shift has resulted in more predictable cash flows and potentially higher lifetime customer value. The subscription model has helped Autodesk weather economic fluctuations more effectively, as recurring revenues provide a buffer against short-term market volatility.
Autodesk aims to capitalize on its position as a market leader in the CAD market by investing in generative AI to enhance its customer base. Autodesk AutoCAD has the highest market share of 31%, followed by Dassault SolidWorks with 12%, Dassault Systemes (DASTY - Free Report) with 10%, and ANSYS (ANSS - Free Report) and PTC (PTC - Free Report) with less than 5%, according to a report by PSH.
As the company continues to execute its long-term strategy and adapt to changing market conditions, investors will be weighing the potential for future growth against the current valuation.
Autodesk is trading at a premium with a trailing 12-month EV/EBITDA of 37.08X compared with the Zacks Computer - Software industry’s 18.41X, reflecting a stretched valuation.
ADSK’s EV/EBITDA TTM Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Considerations: Balancing Risk and Reward
Autodesk presents a compelling investment opportunity. The company's dominant position in computer-aided design (CAD) software for architecture, engineering and manufacturing industries provides a strong competitive moat. Autodesk's transition to a subscription-based model has improved revenue predictability and customer retention. The increasing adoption of Building Information Modeling (BIM) and digital transformation across industries drives demand for Autodesk's solutions. With emerging technologies like generative design and cloud-based collaboration tools, Autodesk is well-positioned for long-term growth. However, economic cycles affecting the construction and manufacturing sectors pose potential risks to the company's performance.
Conclusion
The company's strong market position, successful transition to cloud-based solutions, and strategic focus on sustainability and emerging technologies like generative design, digital twins, and BIM position it well for future success. Risk-averse investors or those with a shorter investment horizon may want to exercise caution and wait for a better entry point, given the uncertainties surrounding the company's ability to maintain high growth rates in a maturing market. Autodesk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.