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Analysts Hold Their Views On Autodesk Despite Mixed Quarter

Shanthi Rexaline

Autodesk, Inc. (NASDAQ: ADSK) reported below-par first-quarter results Thursday, sending the stock lower. 

The Analysts

Wedbush analyst Steve Koenig maintained a Neutral rating on Autodesk and lowered the price target from $166 to $164.

KeyBanc Capital Markets analyst Jason Celino maintained an Overweight rating and $196 price target.

Wells Fargo Securities analyst Philip Winslow maintained an Outperform rating and $200 price target.

Morgan Stanley analyst Keith Weiss maintained an Equal-weight rating and $150 price target.

Bank of America Merrill Lynch analyst Kash Rangan maintained a Neutral rating and raised the price target from $169 to $170.

Cantor Fitzgerald analyst Richard Davis maintained a Buy rating and $190 price target.

Wedbush: Q1 Miss Doesn't Matter Much In Big Picture 

Autodesk reported one of the weaker quarters seen in a while, missing on revenue and EPS and posting sequentially flat annual recurring revenue, or ARR, when adjusted for acquisitions, Koenig said in a Friday note.

If not for a promotion the company ran in late April in North America with the largest subscription discounts, the results would have been worse, the analyst said. 

On a positive note, the company reported a big beat on billings and cash flow due to collections from the strong fourth quarter, he said. 

"Also, a light 1Q probably doesn't matter much in the grand scheme, as long as the global demand environment remains on track and there's not a lurking execution issue." 

KeyBanc: Near-Term Outlook Intact 

Autodesk's quarter was more back-half weighted, with the ARR growth slightly missing estimates, Celino said in a Thursday note.

The company remains confident of its pipeline and reiterated its fiscal 2020 guidance, the analyst said. 

"We believe the near-term outlook remains intact, and Autodesk has ample growth drivers to power its next leg of growth." 

View more earnings on ADSK

KeyBanc said it remains a buyer of the stock. 

See also: Autodesk Analysts Talk Growth Drivers After Investor Day

Wells Fargo: Autodesk On Track To Achieve Full-Year Targets

Autodesk reported a solid first quarter, keeping it on track to achieve its full-year targets, Winslow said in a Thursday note. 

The analyst said he believes continued optimism within the construction industry — in addition to the company's increasingly macro-resilient business model and non-subscriber conversion opportunity — should help subdue investor concerns regarding cyclicality, the analyst said. 

Morgan Stanley: Underlying Demand Trend Intact

Notwithstanding the mixed quarter, Autodesk's underlying demand trend appears intact, Weiss said in a Friday note. 

The company maintained its fiscal 2020 free cash flow target of $6 per share, citing growing multiyear contracts, the analyst said. 

Weiss expressed comfort with the traction in the construction portfolio, the 37-percent growth in AutoCAD and AutoCAD long-term revenue growth, billings and free cash flow.

Valuation, China Tariff War Keep BofA Sidelined 

The stock is headed for multiple quarters of slowing ARR growth, which peaked in the third quarter, as well as lower-quality free cash flow growth, Rangan said in a Friday note. 

The stock is likely rangebound until further clarity exists around upside opportunities in the long-term model, the analyst said. 

"We remain Neutral on valuation and potential tail risk from the China tariff war." 

Cantor: Autodesk Stock Could Double Within 4 Years

Notwithstanding a good, but not uniformly exceptional, quarter, Davis said he's confident that Autodesk's transition to subscription pulls the firm ahead of its competition.

The company's doubling down into construction management through M&A gives it a new vector of growth in a fairly underpenetrated segment, the analyst said. 

"By our reckoning, these efforts should allow Autodesk to compound revenue and FCF at roughly 17% and 21% from C2019-22, respectively." 

Davis said he would use the pullback to build out at least a full position, given his belief the stock could double within four years.

The Price Action

Autodesk shares were down 3.88 percent at $162.97 at the time of publication Friday. 

Related Link: Autodesk Analyst Positive On Momentum, Strategy, Positioning

Latest Ratings for ADSK

Date Firm Action From To
May 2019 Maintains Neutral
Apr 2019 Initiates Coverage On Buy
Apr 2019 Reinstates Overweight

View More Analyst Ratings for ADSK
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