Autodesk (ADSK) Stock Analysis

Overview

Autodesk, Inc. (ADSK) is a global software company best known for AutoCAD, Revit, and a broad portfolio of design, engineering, and media tools that serve architecture, engineering, construction (AEC), manufacturing, and entertainment end markets. The business is predominantly subscription-based, with a high mix of recurring revenue and a strategic push toward cloud-connected, platform-centric workflows.

From the latest snapshot, Autodesk has an approximate market capitalization of $58.8 billion, trades at a trailing P/E of ~53.5x with a forward P/E of ~23.8x, and is viewed favorably by the sell side, indicated by a “buy” recommendation key and an average analyst target price of about $365.71 (with a range of $275 to $460). Institutional sponsorship is very strong, with institutions holding roughly 96% of the float.

The stock has underperformed the broader market over the last year, with a 52-week price change of about -3.1% versus approximately +19.4% for the S&P 500, suggesting some multiple compression and/or sentiment resetting despite solid underlying fundamentals.

Profitability & Cash Flow

Autodesk operates a high-margin, asset-light software model:

• Operating margin stands at roughly 25.7%, supported by scalable subscription revenues and disciplined opex.
• EBITDA margin is similarly robust at approximately 25.7%, reflecting strong unit economics.
• Net profit margin is about 16.1%, consistent with mature, high-quality software franchises.

Return metrics and capital structure:

• Return on equity (ROE) is elevated at about 40.3%, boosted by both strong profitability and the use of leverage.
• Debt-to-equity is relatively high at roughly 94.5%, signaling a balance sheet that uses meaningful leverage but is typical for a mature, cash-generative software firm.
• Current ratio of 0.82 indicates a tighter liquidity position on a pure current assets vs. liabilities basis, though this is partly structural for subscription software firms with deferred revenue and not necessarily indicative of stress.

Cash generation is a key strength:

• Free cash flow (FCF) is approximately $2.54 billion on a trailing basis, underscoring the company’s ability to self-fund R&D, M&A, and shareholder returns.
• At a market cap of around $58.8 billion, this implies a trailing FCF yield of roughly 4–4.5%, which is attractive relative to growth expectations.

Valuation relative to profitability:

• The price-to-sales ratio is ~8.5x, and price-to-book is ~20.2x, reflecting investors’ willingness to pay a premium for Autodesk’s margin profile, sticky customer base, and recurring revenue visibility.
• The combination of forward P/E (~23.8x) and earnings growth expectations (~26%) suggests a more reasonable implied forward PEG on a go-forward basis than the trailing P/E alone would imply.

Overall, Autodesk’s profitability and cash-flow profile are strong, with high ROE and substantial FCF supporting ongoing investment and potential capital returns, albeit with some balance-sheet leverage to monitor.

Growth Profile

Autodesk’s business transformation to subscriptions and cloud has historically supported attractive growth:

• The latest snapshot suggests earnings growth of about 26% and revenue growth of around 18%, pointing to a healthy combination of top-line expansion and operating leverage.
• These figures are consistent with Autodesk’s positioning as a growth-oriented, high-margin design software provider, particularly in AEC and manufacturing where digitalization remains underpenetrated.

Earnings history and surprise patterns

The earnings history provided is extensive and spans back multiple cycles. While early periods show modest EPS levels and occasional misses, the more recent data (post-cloud transition) illustrate more consistent delivery:

• Over the last several years, Autodesk has frequently exceeded EPS estimates, often by mid-single to high-single-digit percentages.
• Recent examples highlight this pattern:
  • At one recent quarter, EPS estimate was 1.73 vs. actual 1.91, a ~10.7% positive surprise.
  • Another quarter showed 1.99 estimated vs. 2.07 actual, a ~4.0% beat.
  • The latest entries indicate EPS estimates in the 2.0–2.67 range, with actuals consistently higher, delivering positive surprises of roughly 2–7%.

Taken together, Autodesk has demonstrated:

• A strong track record of meeting or beating EPS expectations in recent years.
• The ability to translate revenue growth into faster EPS growth through margin expansion and share repurchases (if any), consistent with the earnings growth rate (~26%) cited.

Autodesk’s growth algorithm appears anchored in:

1. Seat and adoption growth in AEC, manufacturing, and media design.
2. Price and mix improvements, leveraging strong product positioning and subscription renewals.
3. Expansion of cloud-based platforms and adjacent workflows (e.g., construction management, digital twins, generative design) that deepen wallet share.

Macro and cyclical sensitivity remain a consideration—particularly exposure to construction and manufacturing cycles—but the subscription model provides resilience and visibility.

Competitive Landscape

Autodesk competes in a global market for AEC, product lifecycle management (PLM), computer-aided design (CAD), and simulation software. Key competitors include:

• Dassault Systèmes SE (DASTY)
  A major European PLM and 3D design software provider (CATIA, SOLIDWORKS, 3DEXPERIENCE). Dassault is particularly strong in automotive, aerospace, and complex manufacturing. Compared with Autodesk, Dassault skews somewhat more toward high-end industrial PLM, whereas Autodesk is stronger in AEC and a broader mid-market CAD base. Both companies share similar subscription and platform strategies, with Autodesk more construction-centric and Dassault more deeply embedded in industrial OEMs.
• PTC Inc. (PTC)
  Focused on CAD (Creo), PLM (Windchill), and industrial IoT/AR platforms (ThingWorx, Vuforia). PTC directly competes with Autodesk in mechanical CAD and PLM for manufacturing. PTC has been successful with SaaS transitions and is increasingly cloud-native, offering competitive pressure particularly in discrete manufacturing. Autodesk’s differentiation rests on its AEC dominance and a broader ecosystem spanning design to construction, while PTC leans into industrial IoT and service lifecycle management.
• Bentley Systems, Inc. (BSY)
  Specializes in infrastructure engineering software (roads, bridges, utilities, rail, water). Bentley is a formidable competitor in civil and infrastructure design and competes with Autodesk’s Civil 3D and related AEC tools. Bentley’s strength lies in very deep infrastructure workflows and owner-operator relationships, while Autodesk benefits from a broader, more horizontal footprint and a larger installed base in general AEC, architecture, and building design.
• Ansys, Inc. (ANSS)
  A leader in engineering simulation. While not a pure CAD competitor, Ansys competes for engineering budgets and is increasingly integrated with CAD/PLM flows. Autodesk’s simulation capabilities are less broad and deep than Ansys’s, so many customers use Autodesk for design and Ansys for advanced simulation. This dynamic creates coopetition but also limits Autodesk’s wallet share in high-end simulation unless it invests more aggressively in this area.
• Trimble Inc. (TRMB)
  Active in construction technology, geospatial solutions, and project site hardware/software. Trimble competes with Autodesk in construction management, project controls, and field solutions, particularly through its own software plus hardware integration. Autodesk’s strength lies in design-originated BIM (Revit ecosystem) and cloud collaboration, whereas Trimble differentiates with field equipment, positioning, and on-site workflow integration.

Competitive positioning

Autodesk’s key competitive advantages include:

• Entrenched installed base in AutoCAD and Revit, resulting in high switching costs and strong renewal dynamics.
• Ecosystem and interoperability, with a wide installed base of partners, developers, and standardized workflows in AEC.
• Recurring revenue model with strong visibility, supported by long-term contracts and maintenance-to-subscription conversions largely complete.

Key competitive challenges:

• Rivals like Dassault and PTC continue to innovate aggressively in PLM and cloud-native offerings.
• Bentley and Trimble are well positioned in specific verticals (infrastructure, field/geo), where Autodesk must invest to maintain or broaden its influence.
• Platform convergence and the push toward integrated, cloud-based construction and manufacturing platforms raise the bar for ongoing R&D and M&A.

In sum, Autodesk combines a strong competitive position, high margins, and robust FCF generation with a history of consistent EPS outperformance and mid-teens-plus growth. Investors must balance these strengths against a premium valuation, leverage levels, and cyclical exposure to construction and manufacturing software budgets.