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Autodesk Inc’s (NASDAQ:ADSK) Shift From Loss To Profit

Petra Goodwin

Autodesk Inc’s (NASDAQ:ADSK): Autodesk, Inc. operates as a design software and services company worldwide. The US$29.90B market-cap company announced a latest loss of -US$566.90M on 31 January 2018 for its most recent financial year result. The most pressing concern for investors is ADSK’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for ADSK, its year of breakeven and its implied growth rate.

View our latest analysis for Autodesk

According to the industry analysts covering ADSK, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$428.57M in 2020. ADSK is therefore projected to breakeven around 2 years from now. What rate will ADSK have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 57.42%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:ADSK Past Future Earnings May 11th 18

Given this is a high-level overview, I won’t go into detail the detail of ADSK’s upcoming projects, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I would like to bring into light with ADSK is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of ADSK to cover in one brief article, but the key fundamentals for the company can all be found in one place – ADSK’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should look at:

  1. Valuation: What is ADSK worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ADSK is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Autodesk’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.