Technology

Have Analysts Decided It's Finally Time for Autodesk to Slow Down?

Chris Lange

Published: August 28, 2019 10:30 am

Last Updated: January 30, 2020 4:51 pm

Autodesk Inc. (NASDAQ: ADSK) released its fiscal second-quarter financial results after the markets closed on Thursday. While analysts were mostly positive on the stock following the report, there was a clear trend of analysts walking back their targets. Autodesk has been on an absolute tear over the past four years, and it now seems the stock is slowing down.

24/7 Wall St. has included here some highlights from the most recent quarterly report, as well as what analysts are saying after the fact.

The software firm said that it had $0.65 in earnings per share (EPS) and $796.8 million in revenue, which compared with consensus estimates of $0.61 in EPS and $786.98 million in revenue. The same period of last year reportedly had EPS of $0.19 on $611.7 million in revenue.

During the quarter, total annualized recurring revenue increased 31% to $3.07 billion as reported, as well as on a constant currency basis. Total recurring revenue in the second quarter was 96% of total revenue, consistent with the second quarter last year. Separately, total billings increased 48% year over year to $893 million.

Looking ahead to the fiscal third quarter, the company expects to see EPS in the range of $0.70 to $0.74 and revenue between $820 million and $830 million. Consensus estimates call for $0.77 in EPS and $838.78 million in revenue for the quarter.

This stock had surged higher over the past few years and offered very little pullback over that time. That seems no longer to be the case, and this looks to be the first time in years that the analyst community unilaterally has made this many big price target cuts.

Autodesk has seen many target price cuts after the news:

• Canaccord Genuity reiterated a Buy rating but cut its price target to $160 from $190.
• Credit Suisse reiterated it as Outperform and cut its price target to $175 from $188.
• Citigroup reiterated a Buy rating and lowered its target price to $186 from $210.
• Barclays reiterated its Overweight rating and cut its price target to $173 from $199.
• Merrill Lynch downgraded it to Underperform from Neutral and cut its target to $127 from $170.
• JPMorgan reiterated a Neutral rating and cut its price target from $165 to $160.
• Stifel reiterated a Buy rating and cut its price objective to $160 from $185.
• KeyBanc reiterated an Overweight rating and cut its price target from $196 to $184.
• Oppenheimer reiterated it as Outperform and cut its price target to $175 from $190.
• Wedbush reiterated a Neutral rating and lowered its target price to $149 from $164.
• Wells Fargo reiterated its Outperform rating but cut its target to $180 from $200.

Shares of Autodesk traded down about 11% Wednesday morning to $133.25, in a 52-week range of $117.72 to $178.95. The consensus price target is $188.73.