Should You Buy Autodesk Inc (NASDAQ:ADSK) Now?
Let’s talk about the popular Autodesk Inc (NASDAQ:ADSK). The company’s shares received a lot of attention from a substantial price increase on the NasdaqGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Autodesk’s outlook and valuation to see if the opportunity still exists. See our latest analysis for Autodesk
What is Autodesk worth?
The stock is currently trading at US$136.19 on the share market, which means it is overvalued by 60% compared to my intrinsic value of $85.23. This means that the opportunity to buy Autodesk at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Autodesk’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Autodesk look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. In the upcoming year, Autodesk’s earnings are expected to increase by 73.15%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? ADSK’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe ADSK should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on ADSK for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for ADSK, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Autodesk. You can find everything you need to know about Autodesk in the latest infographic research report. If you are no longer interested in Autodesk, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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.
