As Autodesk Breaks Out On Q2 Earnings, Market Cycles Point Even Higher

Autodesk, Inc. ADSK traded 15 percent higher on Friday morning after posting second quarter earnings that beat analyst estimates.

The software maker reported earnings per share of $0.19 and total revenue of $611.7 million, above Wall Street expectations of $0.16 and $600.34 million. Management raised its revenue guidance for the 2019 fiscal year to $2.485-2.505 billion and presented guidance for Q3 in line with estimates.

CEO Andrew Anagnost explained that, “Our strong Q2 results led by 28 percent growth in recurring revenue reflect a healthy demand environment.” Since Autodesk changed to a subscriber revenue model, it has added 1.7 million net subscriptions.

In reviewing the market cycles for the company, we can see that it has started the rising phase of a new cycle. The stock’s recent history has produced a positive pattern, which is likely to hit $165 in the near-term. It is notable however that its valuation is sky high, which is based on part on big expectations through 2020.

Autodesk Stock Chart With Weekly Bars

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