KeyBanc Raises Autodesk Price Target, Estimates After Q4 Print

Autodesk, Inc. ADSK reported slightly better-than-expected revenue and earnings per share in the fourth quarter, although net subscriber adds were soft, according to KeyBanc Capital Markets. 

The Analyst

KeyBanc analyst Monika Garg maintained an Overweight rating on Autodesk and increased the price target from $134 to $138

The Thesis

Q4 annualized recurring revenue, or ARR, came in line with estimates, Garg said in a Tuesday note.

For 2019, Autodesk projects net subscriber addition growth of 14.2 percent, falling short of expectations of 18-19 percent, the analyst said. 

The company's ARR guidance was strong at 28-30 percent, above the 24-26 percent consensus estimate, Garg said. 

"Autodesk also provided FY19 revenue and EPS guidance in accordance with ASC 606, and is seeing a negative impact of $40 million to revenue and 15 cents to EPS," Garg said. The revenue guidance is slightly below the consensus, the analyst said.

Given the above-consensus ARR guidance for fiscal 2019 and the weak net subscriber addition guidance, the company has to increase average revenue per subscriber by 13-14 percent, according to KeyBanc. 

KeyBanc modestly raised its estimates for fiscal 2020 and 2021 on the basis of Autodesk's updated outlook and tax benefits. 

The Price Action

Autodesk shares were up about 45 percent over the past year through Tuesday. 

The stock was surging nearly 13 percent to $135.41 at the time of publication Wednesday. 

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Photo courtesy of Autodesk.