Autodesk Shares Drop 5% on Worse Than Expected Outlook

Autodesk, Inc. (NASDAQ: ADSK) is a leading software company known for its design and engineering software, widely used in industries such as architecture, engineering, and construction. The company faces competition from firms like Adobe and Dassault Systèmes. Recently, Autodesk has been in the news due to a stock transaction by its Senior Vice President and Chief Accounting Officer, Hope Stephen W.

On March 28, 2025, Hope Stephen W. sold 2,452 shares of Autodesk's common stock at $267.29 each. This transaction leaves him with 3,003 shares. This sale comes amid Autodesk's ongoing efforts to enhance shareholder value, as highlighted by its response to Starboard Value LP's comments. Autodesk emphasizes its strong business performance and strategic initiatives aimed at generating long-term value.

Autodesk has been actively engaging with its shareholders, representing over half of its outstanding shares, to maintain a constructive dialogue. The company has also strengthened its Board of Directors by appointing two independent directors with proven records of value creation. Despite Starboard's tactics, including misrepresentations and a reduction of its stake, Autodesk remains committed to acting in the best interests of its shareholders.

The company's recent financial results and strategic initiatives have led to total shareholder returns that surpass those of its peers. Autodesk has been working to drive growth, expand operating margins, and generate substantial free cash flow. In fiscal year 2025, the company launched a new go-to-market approach, further solidifying its market position.

Currently, Autodesk's stock price is $261.63, reflecting a decrease of 3.03% or $8.18. The stock has traded between $260.94 and $268.28 today, with a market capitalization of approximately $55.73 billion. The trading volume for the day is 1,233,244 shares on the NASDAQ exchange. Despite the recent dip, Autodesk's strategic efforts and strong business performance continue to position it well in the market.

Autodesk (NASDAQ:ADSK) shares fell over 4% intra-day today despite the company delivering fourth-quarter earnings and revenue that exceeded Wall Street expectations. The company also provided an optimistic full-year forecast and unveiled a restructuring plan that includes job reductions.

For the quarter, Autodesk reported earnings per share of $2.29, surpassing analysts’ consensus estimate of $2.14. Revenue climbed to $1.64 billion, edging past the expected $1.63 billion. Looking ahead, Autodesk issued a robust forecast for the first quarter of fiscal 2026, projecting earnings per share between $2.14 and $2.17, ahead of analyst expectations of $2.07. Revenue is expected to range from $1.6 billion to $1.61 billion, aligning with forecasts.

For the full fiscal year, Autodesk anticipates earnings per share in the range of $9.34 to $9.67, exceeding the consensus estimate of $9.26. The company also projects annual revenue between $7.06 billion and $7.21 billion, well above analysts’ expectations of $6.89 billion.

• HSBC downgrades Autodesk Inc. (NASDAQ:ADSK) from "Buy" to "Hold" due to valuation and growth concerns.
• Citi raises its price target for Autodesk to $361, highlighting the company's strong third-quarter billings as a sign of healthy revenue collection.
• Autodesk's third-quarter results present a mixed bag, with uncertainty around fiscal year 2026 free cash flow targets and varied reactions to the new CFO appointment.

Autodesk Inc. (NASDAQ:ADSK) is a leading software company known for its design and engineering software, primarily used in architecture, engineering, construction, manufacturing, and media industries. The company faces competition from firms like Adobe and Dassault Systèmes. Recently, HSBC downgraded Autodesk from a "Buy" to a "Hold" rating, citing concerns about valuation and growth moderation. At the time, the stock price was around $291.98.

Despite HSBC's downgrade, Citi has shown confidence in Autodesk by raising its price target from $358 to $361 while maintaining a "Buy" rating. This decision comes after Autodesk's strong third-quarter performance, particularly in billings, which indicates healthy revenue collection. Citi's analyst views the recent dip in Autodesk's share price as a potential buying opportunity.

Autodesk's third-quarter results have been a mixed bag for investors. While the company has outperformed its peers in estimate revisions, there is some uncertainty regarding its fiscal year 2026 free cash flow targets. Additionally, the appointment of Janesh Moorjani as the new CFO has received varied reactions from investors, adding to the mixed sentiment.

Currently, Autodesk's stock is trading at $291.90, showing a slight increase of $1.26 or 0.43%. The stock has fluctuated between $289.03 and $292.62 today. Over the past year, it has seen a high of $326.62 and a low of $195.32, reflecting its volatility. Autodesk's market capitalization stands at approximately $62.76 billion, with a trading volume of 1,317,326 shares on the NASDAQ exchange.

Autodesk (NASDAQ:ADSK) saw its shares decline by more than 7% in pre-market today after reporting third-quarter results that slightly exceeded expectations but failed to impress investors.

For the third quarter of fiscal 2025, the design software company posted adjusted earnings per share of $2.17, beating the Street consensus estimate of $2.12. Revenue rose 11% year-over-year to $1.57 billion, marginally surpassing analyst projections of $1.56 billion.

Autodesk issued mixed guidance for the fourth quarter. The company projected adjusted EPS in the range of $2.10 to $2.16, aligning closely with analyst expectations of $2.12. Revenue guidance of $1.623 billion to $1.638 billion placed the midpoint slightly above the consensus estimate of $1.62 billion.

The company faced headwinds, with its GAAP operating margin dropping by two percentage points to 22% and its non-GAAP operating margin declining by three percentage points to 36%. Autodesk's net revenue retention rate stayed within the 100% to 110% range on a constant currency basis, reflecting steady performance in retaining customers.

Autodesk, Inc. (NASDAQ:ADSK) is a leading software company known for its 3D design, engineering, and entertainment software and services. It serves various industries, including architecture, engineering, construction, and media. Autodesk competes with companies like Adobe and Dassault Systèmes. The company is transitioning to a subscription model, which is expected to provide long-term stability.

The consensus price target for Autodesk has shown a notable upward trend over the past year. Last month, the average price target was $330, indicating positive sentiment among analysts. This suggests potential growth and confidence in Autodesk's future performance. The stock price has increased by 27% year-to-date, reflecting this optimism.

Three months ago, the average price target was $300.62, marking a significant increase of nearly $30 in just a quarter. This reflects growing optimism about Autodesk's prospects. However, the company's stretched valuation and challenges from maintenance revenues and competition have caused some investors to remain cautious.

A year ago, the average price target stood at $287.59. Over the past year, the consensus price target has increased by approximately $42.41. Analyst Matthew Hedberg from RBC Capital has set a price target of $295, indicating confidence in Autodesk's potential to surpass quarterly earnings estimates.

Autodesk's transition to a subscription model and recent billing changes have impacted short-term cash flow. However, these changes are expected to provide long-term growth potential. Activist investor Starboard Value is pressuring Autodesk to enhance operations and increase shareholder value, highlighting the company's strong market position and potential in generative AI.

Autodesk, Inc. (NASDAQ:ADSK) is a leading software company known for its design and engineering software, widely used in industries like architecture, construction, and manufacturing. As it prepares to release its quarterly earnings on November 26, 2024, analysts are closely watching its financial performance. Autodesk competes with companies like Adobe and Dassault Systèmes in the software industry.

Wall Street analysts estimate Autodesk's earnings per share (EPS) to be $2.12 for the upcoming quarter. However, the company is expected to report an EPS of $2.11, reflecting a year-over-year increase of 1.9%. This slight difference in estimates highlights the importance of accurate earnings projections, as changes can significantly impact investor reactions, as highlighted by empirical studies.

Autodesk's projected revenue for the quarter is approximately $1.56 billion, marking a 10.5% increase compared to the same quarter last year. This growth indicates strong performance in its core markets. The company's price-to-sales ratio of 11.70 suggests that the market values Autodesk at nearly 12 times its annual sales, reflecting investor confidence in its revenue-generating capabilities.

Despite a high price-to-earnings (P/E) ratio of 64.45, Autodesk's earnings yield stands at 1.55%, providing a measure of return on investment. The enterprise value to sales ratio is slightly higher at 11.89, indicating the company's total valuation in relation to its sales. These metrics suggest that investors are optimistic about Autodesk's future growth prospects.

Autodesk's debt-to-equity ratio of 0.95 shows it has slightly less debt than equity, which is a positive sign for financial stability. However, the current ratio of 0.64 suggests potential challenges in covering short-term liabilities with short-term assets. This could be a point of concern for investors, as it may impact the company's liquidity position.

Morgan Stanley analysts reiterated an Overweight rating on Autodesk (NASDAQ:ADSK) with a price target of $320 on the stock.

The analysts emphasized that Autodesk is Morgan Stanley's top pick, highlighting the company's potential for margin and EPS growth. Autodesk's shares are currently trading at a discount compared to both design software and larger software peers, despite improving fundamentals in areas such as free cash flow, revenue growth, and operating margins.

Following Autodesk's Q2 2025 results, where management emphasized their industry-leading GAAP margins, the analysts conducted an in-depth analysis of the company’s path to further margin expansion, go-to-market optimizations, and the impact of its new transaction model. The analysts believe these factors will drive EPS growth and position the company for multiple expansion, further solidifying Autodesk's strong risk/reward profile.