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Bear Of The Day: Autodesk (ADSK)

·2 min read
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Autodesk (ADSK) is a Zacks Rank #5 (Strong Sell) but it has the growth divergence that I love to see. What is a growth divergence? Well the Zacks Style Score for ADSK shows a D for Value and an A for Growth. Whenever I see a big divergence between the two I know I am on the right path for a growth stock. This stock has the lowest Zacks Rank, but that doesn’t mean its not worth a deeper look.

Description

Autodesk, Inc. is an American multinational software corporation that makes software products and services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries.

Earnings History

I see a good earnings history with 4 beats of the Zacks Consensus Estimate over the last year. The beats were all of size and the average positive earnings surprise over the last four quarters was 8.4%.

This isn’t why the stock has fallen to the lowest Zacks Rank, but its still good information to know.

Estimate Revisions

The Zacks Rank tells us when earnings estimates are moving up and down. As a Zacks Rank #5 (Strong Sell), we know that estimates are falling to let’s take a look at how bad it is.

I see the current quarter has slipped from $1.08 to $0.95 in the last week.

Over the same time horizon I see the next quarter dropping 8 cents to $1.10.

The full fiscal year 2022 slipped from $5.10 to $4.98, while next year is down 11 cents to $7.01.

Those are negative revisions, but they are not that big…so let’s check out the valuation

Valuation

The valuation for ADSK is a little high with a 54x forward earnings multiple. The price to book of 61x is also very high even for an asset slim business like this. The price to sales multiple of 15x is pretty high for a company posting 15% topline growth in the most recent quarter. On the bright side, I see margins improving and that is a solid sign for the future.

Chart

Autodesk, Inc. Price and Consensus

Autodesk, Inc. Price and Consensus
Autodesk, Inc. Price and Consensus

Autodesk, Inc. price-consensus-chart | Autodesk, Inc. Quote

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