Autodesk’s 3Q Profit Beats The Street As Subscription Sales Jump; Street Bullish

Autodesk reported impressive 3Q results, spurred by robust subscription sales. The software design and services company’s 3Q earnings of $1.04 per share crushed the Street’s estimates of $0.96 and spiked 33.3% year-over-year.

Autodesk’s (ADSK) revenues increased by 13% year-over-year to $952.4 million and exceeded analysts’ expectations of $942.2 million. The company’s subscription plan sales increased by 24% to $884 million year-on-year.

“Third quarter revenue, earnings, and free cash flow were above expectations, driven by the strength of our healthy subscription renewal rates and continued success with enterprise customers,” said Autodesk CFO Scott Herren. “We are executing with strength, with current remaining performance obligations growing 16 percent year over year despite uncertain macro-economic conditions. The business model transition we have made leaves us well positioned as the secular-industry shift to the cloud accelerates.” (See ADSK stock analysis on TipRanks).

Autodesk raised its adjusted EPS guidance range for fiscal 2021 to $3.91-$3.97 from $3.72-$3.90. The company revised its fiscal 2021 revenue outlook to $3.750-$3.765 billion from its previous forecast $3.715-$3.765 billion. For 4Q, it anticipates revenues and adjusted earnings in the range of $999-$1,014 million and $1.04-$1.10 per share, respectively.

On Nov. 19, Oppenheimer analyst Koji Ikeda reiterated a Buy rating on the stock and the price target of $300 (15.8% upside potential) following checks with several construction industry participants. Ikeda said that “Autodesk is a well-established franchise and industry leader and is a must-have technology in nearly every vertical it operates in. We believe the business is well positioned in a large but lightly penetrated construction industry TAM that is yearning for next-generation technologies, like Autodesk’s, to help digitize the industry, which should support the next leg of growth.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 13 Buys, 2 Holds and 1 Sell. The average price target stands at $272 and implies upside potential of about 5% to current levels. Shares have increased by about 41.2% year-to-date.

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