Autodesk has set sights on Upchain as it looks to accelerate product development and data processes in the cloud. The company has signed a definitive agreement to acquire the provider of instant-on cloud-based and product data management solutions.
Once complete, the acquisition should allow Autodesk (ADSK) to deliver more value to engineers, manufacturers, and suppliers. The company plans to leverage Upchain’s solutions to enhance collaboration across various decentralized product value chains.
Upchain will join Autodesk, having established itself as a unified cloud platform provider that helps manufacturers leverage data to manage complexities across various teams. Autodesk has reiterated it will stick to Upchain’s open approach for data, thereby allowing integration with multiple solutions such as Fusion 360 and AutoCAD.
Commenting on the acquisition Autodesk CEO, Andrew Anagnost, stated “The convergence of data and processes is transforming the industry. By integrating Upchain with our existing offerings, Autodesk customers will be able to easily move data without barriers and will be empowered to unlock and harness valuable insights that can translate to fresh ideas and business success.”
Following a 66% gain in 2020, Autodesk shares are down 2.3% year to date. (See Autodesk stock analysis on TipRanks).
The proposed acquisition follows suggestions that the design software provider is well-positioned to benefit from the Biden administration’s proposed $2 trillion infrastructure push. According to a report on Investing.com, Autodesk could easily beat its double-digit fiscal 2025 estimate on the government moving to revamp schools, affordable housing, and manufacturing.
Sharing similar sentiments is Berenberg Bank’s analyst Gal Munda who insists Autodesk is one of the highest quality assets in the Design Software sector.
“We believe that the company’s long-term strategy is just starting to play out, even though all eyes are still on its FY23 financial target. This note is a result of our primary analysis that indicates $2.4bn FCF is achievable and Autodesk is likely to beat its FY25 growth CAGR estimate materially,” stated Mr. Munda.
Likewise, the analyst maintains a Buy rating on Autodesk with a $370 price target implying 23.80% upside potential to current levels.
Wall Street currently rates Autodesk as a Strong Buy based on 9 Buys and 1 Sell rating. The average analyst price target of $338.20 implies 13.16% upside potential to current levels.
According to TipRanks’ Hedge Fund Trading Activity tool, confidence in Autodesk is currently Neutral, as 4 hedge funds decreased their cumulative holdings by 324,000 shares in the last quarter.
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