It’s time to talk about another software name. Here is the breakdown on $ADSK, otherwise known as Autodesk.
Current Price: $308.58
52/Wk High: $321.13
52/Wk Low: $125.38
Market Cap: $67.9 Billion
Read below for the breakdown!
Autodesk ($ADSK) is a major software company that develops and offers computer-aided design software and other various services. In fact, Autodesk notes that the company makes software for those who make things.
Digging into Autodesk’s core offerings, the company’s AutoCAD software is their biggest and most popular product and has become one of the most common CAD softwares amongst global industries.
The large majority of Autodesk products are positioned towards engineers, architects, and construction, all of which are industries that continue to grow.
In recent news, Autodesk made a major acquisition of AI company Spacemaker in November for a whopping $240 million.
The acquisition boosts Autodesk’s competitive advantage in the architecture and construction space, given that Spacemaker’s software offerings were geared toward developers and architects.
On a final note, the Spacemaker acquisition marks Autodesk’s fifth acquisition, only going to show that management is not going to sit back, but instead actively attempt to maintain leadership within the industry.
Shifting into the numbers Autodesk beat Q3 expectations with an EPS of $1.04, better than the EPS consensus estimate of $0.96. On a year over year basis, EPS improved by 33.33%.
Autodesk went on to report Q3 revenues of $952 million, representing a 13% increase on a year over year basis. Furthermore, GAAP operating margin landed at 18%, representing a 5% gain over the same time 2020 level.
As for the non-GAAP operating margin, the numbers improved as well, totaling 30%, representing a 3% increase over the same time 2020 level.
Autodesk management also reported total billings of $1.01 billion, representing an unfortunate decrease of 1% on a year over year basis.
Breaking down revenues, $848 million was design revenue, representing a 13% increase on a year over year basis as well. Not only that, but Make revenues totaled $77 million, representing an increase of 32% on a year over year basis.
Further diversifying revenues, subscription plan revenues totaled $884 million, representing a 24% increase, while maintenance plan revenues totaled $40 million, representing a 56% decline.
Management reported solid income as well, with GAAP operating income totaling $168 million, much better than the Q3 2020 level of $111 million.
Rounding out Q3, management was upbeat about the company’s performance.
“Our strong third quarter results reflect the growing customer value of our cloud-based platform and the resilience of our subscription business model," CEO Andrew Anagnost said.
Shifting into the balance sheet the numbers could see improvement.
Total Debt: $1.637 Billion
Total Liabilities: $5.875 Billion
Total Assets: $5.945 Billion
Cash & Short Term Inv: $1.616 Billion
When it comes to valuation, Autodesk is quite expensive.
Price to Earnings: 157.91x
Price to Sales: 18.73x
Price to book: 986.71x
Price to Cash Flow: 103.70x
Management has done a solid job as well, focusing on growth and executing above par.
Return on Assets: 7.98%
Return on Invested Capital: 16.45%
Given the numbers the analysts are bullish with a mean price target of $322.85/share, representing a 4.62% gain.
It is also important to note that the high price target is $370.00/share, representing a 19.90% gain, while the low price target is $266.00/share, representing a -13.80% loss.
The big money is quite involved as well, with 91.61% of Autodesk being owned by institutions. Top holders include The Vanguard Group, BlackRock Institutional Trust, and Capital Research Global Investors.
When it comes to the technicals, Autodesk could be presenting an opportunity. According to the six-month charts, the MACD is moving to the downside with significant momentum within a range of 9.07 down to 7.71.
The six-month charts are also indicating an RSI of 58.49 and CCI of 43.93, both of which are falling lower.
In short, Autodesk is a solid name with strong management, a growing product offering, and expanding consumer base.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.