Autodesk, Inc. (NASDAQ:ADSK) shares fell 5.4% to US$191 in the week since its latest annual results. Revenues were US$3.3b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.96 were also better than expected, beating analyst predictions by 14%. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Autodesk after the latest results.
Taking into account the latest results, the most recent consensus for Autodesk from 20 analysts is for revenues of US$3.97b in 2021, which is a substantial 21% increase on its sales over the past 12 months. Statutory earnings per share are expected to jump 155% to US$2.49. Yet prior to the latest earnings, analysts had been forecasting revenues of US$3.98b and earnings per share (EPS) of US$2.61 in 2021. Analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share forecasts for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$214, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Autodesk, with the most bullish analyst valuing it at US$250 and the most bearish at US$150 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Autodesk shareholders.
In addition, we can look to Autodesk's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. Analysts are definitely expecting Autodesk's growth to accelerate, with the forecast 21% growth ranking favourably alongside historical growth of 3.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Autodesk is expected to grow much faster than its market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Autodesk. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Autodesk's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$214, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Autodesk analysts - going out to 2025, and you can see them free on our platform here.
You can also see whether Autodesk is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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