Why Autodesk Shares Are Gaining Today

  • Analysts appreciated Autodesk, Inc ADSK for growing amid macro headwinds.
  • Autodesk reported Q1 FY23 results that were ~3% above Rosenblatt analyst Blair Abernethy's revenue expectations, with higher than anticipated margins, as demand remained strong across its verticals and geographies. 
  • While Product usage rates in Europe dropped temporarily as the Ukraine crisis began, they steadily recovered back to trend. 
  • However, with forex headwinds and the withdrawal from the Russian market, Autodesk trimmed its FY23 Billings growth outlook, Revenue growth, and Non-GAAP operating margins. 
  • Abernethy believes this quarter demonstrated the resilience of Autodesk's subscription-driven revenue base and its broadened product offering that can continue to add growth despite macro headwinds. 
  • Abernethy maintains a Buy rating with a price target of $285.
  • Credit Suisse acknowledged Autodesk's solid Q1 results, beating consensus on revenue and cash flow despite continued macroeconomic headwinds. The results and full-year guidance reinforce its belief that Autodesk is no longer highly cyclical despite concentrated vertical exposure. 
  • Autodesk can still significantly grow (although at a slightly slower rate than previously expected) through near-term geopolitical and macroeconomic disruptions as the company continues to benefit from the tailwind of transitioning its sizeable installed base to subscriptions. 
  • Credit Suisse views Autodesk's long-term growth drivers as idiosyncratic. 
  • Specifically, Autodesk ended Q2 FY22 with ~2.0 million active non-subscriber users, equating to an active base of ~8.1 million users entering FY2023. 
  • Credit Suisse believes active non-subscriber users will convert to paid subscription plans over the next ~5-7 years and serve as a tailwind enabling Autodesk to grow subscriptions and revenue over the long term driving earnings power. 
  • Credit Suisse maintains an Outperform rating with a price target of $355.
  • Price Action: ADSK shares traded higher by 9.01% at $208.90 on the last check Friday.
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