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Autodesk Inc ADSK Stock Quote

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Morningstar‘s Stock Analysis ADSK

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Is it the right time to buy or sell?

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Autodesk Sees Earlier Demand for Annual Contracts, Affecting Billings; Shares Undervalued

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Wide-moat Autodesk reported third-quarter financial results that didn’t surprise, coming right in line with our expectations all around. However, Autodesk experienced a slowdown of business in Europe and currency fluctuations, which had Autodesk missing revenue slightly on an as-reported basis. In terms of visibility, Autodesk’s customers are seeing pressure within some segments, but still seeing a fairly healthy book of business over the next 12-18 months, which gives us confidence that Autodesk’s near-term future is sound, along with unchanged midterm operating margin expectations. Nonetheless, the market reacted to the result negatively, falling by 9% after hours to $191 per share, which we believe is a result of lower billings guidance. However, the change of billings outlook is a factor of less demand for multiyear contracts ahead of Autodesk’s more aggressive push to transition to annual contracts next year. We do not see the premature annual contract demand as concerning. As a result, we are maintaining our $230 fair value estimate, leaving Autodesk shares undervalued, in our view, which we think represents a rare buying opportunity for this high-quality stock.

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Key Statistics ADSK

Company Profile ADSK

Business Description

Founded in 1982, Autodesk is an application software company that serves industries in architecture, engineering, and construction; product design and manufacturing; and media and entertainment. Autodesk software enables design, modeling, and rendering needs of these industries. The company has over 4 million paid subscribers across 180 countries.

111 McInnis Parkway
San Rafael, CA, 94903
T +1 415 507-5000
Industry Software - Application
Most Recent Earnings Jul 31, 2022
Fiscal Year End Jan 31, 2023
Employees 12,600

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