Factors to Note Ahead of Autodesk's (ADSK) Q3 Earnings Release
Autodesk ADSK is scheduled to release third-quarter fiscal 2022 results on Nov 23.
The company anticipates revenues between $1.11 billion and $1.125 billion for the fiscal third quarter. It projects non-GAAP earnings in the range of $1.22-$1.28 per share.
The Zacks Consensus Estimate for fiscal third-quarter earnings has remained steady at $1.25 per share in the past 30 days, suggesting an increase of 20.2% from the year-ago quarter’s reported figure.
The consensus mark for revenues is pegged at $1.12 billion, suggesting an increase of 17.4% from the year-ago quarter’s reported figure.
Autodesk’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of 9.6%, on average.
Autodesk, Inc. Price and EPS Surprise
Autodesk, Inc. price-eps-surprise | Autodesk, Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Consider
Accelerated digital transformation taking place across all industries is driving demand for Autodesk’s cloud solutions. The company’s fiscal third-quarter performance is likely to benefit from solid growth in subscription revenues amid accelerated migration to cloud by customers.
A solid uptick in the maintenance-to-subscription (M2S) program, continued momentum in new customer billings and steady renewals are expected to have acted as a tailwind. In the last reported quarter, billings of $1.015 billion increased 29% year over year.
Robust adoption of AutoCAD and AutoCAD LT product family is expected to have favored the company’s top-line performance.
The company’s latest solution Autodesk Tandem is likely to have witnessed healthy adoption and is expected to have aided fiscal third-quarter revenues. Autodesk Tandem is the company’s cloud-powered digital twin technology platform and is designed for architecture, engineering and construction (AEC) firms.
Autodesk Construction Cloud witnessed steady traction with owners, general contractors and subcontractors across the construction industry, which is anticipated to have benefited the top line. In September 2021, Autodesk announced that more than 350,000 worldwide projects are leveraging Autodesk Construction Cloud to create highly-competent preconstruction workflows.
Gains from Autodesk Build, a new project and field management solution and part of Autodesk Construction Cloud are also expected to have contributed to the top line. In the second quarter of fiscal 2022 earnings conference call, Autodesk noted that Autodesk Build, was being leveraged by 11,000 customer projects worldwide. The solution was made available in February 2021.
Incremental gains from uptake of BuildingConnected, a construction management offering that centralizes and streamlines the bidding process as well as comprises the Autodesk Construction Cloud builders network, is likely to have positively contributed to top-line growth.
Synergies from the buyouts of Upchain and Innovyze augur well. Innovyze is a leader in water infrastructure software, which strengthens Autodesk’s position in the end-to-end water infrastructure solutions’ space. Upchain is a Toronto-based provider of cloud-based product data management and product lifecycle management software solutions.
Muted growth in Maintenance revenues due to continued migration of maintenance plan to subscriptions might have negatively impacted the top line.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Autodesk has an Earnings ESP of 0.00 % and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
PVH PVH has an Earnings ESP of +12.38% and currently holds a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Costco Wholesale COST has an Earnings ESP of +1.00% and flaunts a Zacks Rank of 2, currently.
Lululemon Athletica LULU has an Earnings ESP of +1.44% and sports a Zacks Rank of 2, at present.
Price Movement
Shares of Costco have returned 38.9% in the past year compared with the Zacks Retail Discount Stores industry’s surge of 30%.
Shares of Lululemon Athletica have returned 36.9% in the past year compared with the Zacks Textile Apparel industry’s growth of 31.4%.
Shares of PVH have rallied 58.1% in the past year compared with the Zacks Textile Apparel industry’s rise of 31.4%.
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