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Why Autodesk Stock Popped Nearly 11% Last Month

Chris Neiger, The Motley Fool

What happened

Shares of Autodesk (NASDAQ: ADSK), a design software and services company, jumped 10.7% in February, according to data provided by S&P Global Market Intelligence, after the company received some positive notes from analysts. Investors were also likely buying up shares ahead of the company's fourth-quarter results, which were released at the end of last month.

So what

The first positive note in February came from Deutsche Bank analyst Alex Tout. He reiterated his buy rating on the company's stock and raised his price target from $170 to $180.

Stock market graph chart.

Image source: Getty Images.

Tout's price increase was then followed by RBC Capital analyst Matthew Hedberg's price-target increase, from the previous $163 to $175. Hedberg kept his outperform rating for Autodesk and said that the company should have a "strong year-end" and that its annualized organic revenue would likely be higher than his previous forecast.

Investors were also likely optimistic about Autodesk's stock ahead of its fourth-quarter results. Management said that revenue in the quarter would be up 27% year over year at the midpoint and that GAAP earnings per share would be in the range $0.18 to $0.22, up from a loss of $0.79 in the year-ago quarter.

Now what

Investors were ultimately disappointed with Autodesk's fourth-quarter results because the company's stock has dropped more than 5% following the quarterly report released on Feb 28. Proving that investors can often be fickle, the price drop came even as Autodesk's sales increased by an impressive 33% from the year-ago quarter and earnings outpaced the company's own expectations as well.

With Autodesk's shares dropping despite the company beating its own outlook, investors should be prepared for more volatility from this stock.

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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.