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Category: Stock Market and Autodesk
Date: 15 September 2019 Stock Price: $153.48 We take a look at the2nd quarter earnings release of their 2020 fiscal year of Autodesk the software development group.
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About Autodesk
Autodesk makes software for people who make things. If you’ve ever driven a high-performance car, admired a towering skyscraper, used a smartphone, or watched a great film, chances are you’ve experienced what millions of Autodesk customers are doing with our software. Autodesk gives you the power to make anything.
The image below shows the main markets served by Autodesk
The image below shows the main markets served by Autodesk
Overview of Autodesk's latest earnings report
The numbers we are interested in (for the quarter):
- Net revenue: $796.8 million (up from $611.7 million from the same quarter of the previous year)
- Revenues grew by 30.25% over the lat 12 months
- Cost of revenue: $79.5 million (down from $69.8 million for the same quarter of the previous year)
- Cost of revenues increased by 13.89% over the last 12 months
- Net income: $40.2 million (up from -$39.4 million for the same quarter of the previous year)
- Diluted earnings per share: $0.18 (up from -$0.18 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 222.4 million (up from 219 million for the same quarter of the previous year)
- Cash and cash equivalents: $923,9 million
- Cash and cash equivalents per share: $4.15
- Cash and cash equivalents makes up 2.7% of Autodesk's market capital
- Cash and cash equivalents makes up 18.9% of Autodesk's total assets
- Accounts receivable: $347.4 million
- Trade accounts receivable makes up 8.97% of the Autodesk's total assets.
- Cash generated from operations (for 6 months): $440.5 million
- Cash generated from operations per share (for 6 months): $1.98
Autodesk's management commentary on the results and earnings guidance
SAN RAFAEL, Calif., AUGUST 27, 2019-- Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the second quarter of fiscal 2020.
"We closed a solid first half of the year with a very strong second quarter as revenue, billings, earnings, and free cash flow came in ahead of expectations,” said Andrew Anagnost, Autodesk president and CEO. “ARR grew to a record $3.1 billion, driven by all parts of the business. Construction demonstrated continued strength with wins across all parts of the portfolio, and Fusion 360 - our design-to-manufacturing platform - continued to build momentum.
We also made further strides in capturing opportunities within our non-paying user base. In an environment of increasing uncertainty, we believe we are well-positioned to achieve our FY23 goals." "Our strong performance during the second quarter helped us achieve two milestones," said Scott Herren, Autodesk CFO. "First, we drove our largest quarterly non-GAAP net income to date, followed by a record setting last twelve months free cash flow of $731 million. While we continue to execute well and are not materially impacted by current trade tensions and macro uncertainty, we are taking a prudent stance to our second half fiscal 2020 outlook. Despite these near-term headwinds, our recurring revenue model is much more resilient than in prior cycles.
The image below shows the fiscal guidance for the full 2020 fiscal year of Autodesk.
"We closed a solid first half of the year with a very strong second quarter as revenue, billings, earnings, and free cash flow came in ahead of expectations,” said Andrew Anagnost, Autodesk president and CEO. “ARR grew to a record $3.1 billion, driven by all parts of the business. Construction demonstrated continued strength with wins across all parts of the portfolio, and Fusion 360 - our design-to-manufacturing platform - continued to build momentum.
We also made further strides in capturing opportunities within our non-paying user base. In an environment of increasing uncertainty, we believe we are well-positioned to achieve our FY23 goals." "Our strong performance during the second quarter helped us achieve two milestones," said Scott Herren, Autodesk CFO. "First, we drove our largest quarterly non-GAAP net income to date, followed by a record setting last twelve months free cash flow of $731 million. While we continue to execute well and are not materially impacted by current trade tensions and macro uncertainty, we are taking a prudent stance to our second half fiscal 2020 outlook. Despite these near-term headwinds, our recurring revenue model is much more resilient than in prior cycles.
The image below shows the fiscal guidance for the full 2020 fiscal year of Autodesk.
Autodesk (NASDAQ: ADSK) stock price history
The image below shows the stock price history of Autodesk over the last 5 years. And its been a very good time for Autodesk stockholders. The stock traded at around $55.50 5 years ago, and its currently trading at $153.48. Thats a return of close to 180% provided by Autodesk to stockholders over the last 5 years. The stock is also trading a lot closer to its 52 week high than it is to its 52 week low, which shows that short term sentiment and momentum of Autodesk stock is positive.
Recent coverage of Autodesk
The extract below touches on the latest news regarding Autodesk as obtained from Zacks.
Sometimes, stocks get beat down for no reason at all. It can be very confusing and frustrating for investors when their favorite stock is going down for seemingly no reason. If you pay close attention to earnings estimates from analysts, often times, you can get a warning ahead of impending doom. I don’t want to sound like the harbinger of bad news here, I’m just setting up the reasoning for today’s Bear of the Day.
It’s Zacks Rank #5 (Strong Sell) Autodesk (ADSK - Free Report) . Autodesk, Inc. operates as a design software and services company worldwide. The company offers AutoCAD, a professional design, drafting, detailing, and visualization software; AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects; AutoCAD LT, a professional drafting and detailing software; BIM 360, a construction management cloud-based software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool; and Industry Collections software products for professionals in architecture, engineering and construction, product design and manufacturing, and media and entertainment industries.
The reason for the unfavorable Zacks Rank is the series of earnings estimate revisions coming in to the downside recently. Over the last thirty days, eight analysts have cut their earnings estimates for the next quarter and next year. The bearish sentiment has dropped our Zacks Consensus Estimate from 99 cents to 94 cents for next quarter, while next year’s number has come down from $4.78 to $4.53.
I don’t want to lead on as if Autodesk is tumbling down to zero. In fact, even with these negative estimates, next quarter’s EPS growth is slated to come in at 104%, while next year’s growth number is set to hit 63.7%. Revenue is still set to grow at 21.89% next quarter and 21.7% next year. Growth has slowed some, which has caused Autodesk’s earnings multiple to shrink a bit. The stock is trading at a PE of 54.5x earnings, above the industry average of 41.7x and well above the broad market average of 17.8x.
Read the full article here.
Sometimes, stocks get beat down for no reason at all. It can be very confusing and frustrating for investors when their favorite stock is going down for seemingly no reason. If you pay close attention to earnings estimates from analysts, often times, you can get a warning ahead of impending doom. I don’t want to sound like the harbinger of bad news here, I’m just setting up the reasoning for today’s Bear of the Day.
It’s Zacks Rank #5 (Strong Sell) Autodesk (ADSK - Free Report) . Autodesk, Inc. operates as a design software and services company worldwide. The company offers AutoCAD, a professional design, drafting, detailing, and visualization software; AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects; AutoCAD LT, a professional drafting and detailing software; BIM 360, a construction management cloud-based software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool; and Industry Collections software products for professionals in architecture, engineering and construction, product design and manufacturing, and media and entertainment industries.
The reason for the unfavorable Zacks Rank is the series of earnings estimate revisions coming in to the downside recently. Over the last thirty days, eight analysts have cut their earnings estimates for the next quarter and next year. The bearish sentiment has dropped our Zacks Consensus Estimate from 99 cents to 94 cents for next quarter, while next year’s number has come down from $4.78 to $4.53.
I don’t want to lead on as if Autodesk is tumbling down to zero. In fact, even with these negative estimates, next quarter’s EPS growth is slated to come in at 104%, while next year’s growth number is set to hit 63.7%. Revenue is still set to grow at 21.89% next quarter and 21.7% next year. Growth has slowed some, which has caused Autodesk’s earnings multiple to shrink a bit. The stock is trading at a PE of 54.5x earnings, above the industry average of 41.7x and well above the broad market average of 17.8x.
Read the full article here.
Autodesk (NASDAQ: ADSK) latest stock valuation
So based on Autodesk's latest earnings report and the fiscal guidance provided, and the fact that it was named Zacks's Bear of the Day, what is the stock of Autodesk actually worth? And is it a good time to buy Autodesk stock? Based on their latest earnings and the fiscal guidance provided we value the stock of Autodesk at $104.10 . We therefore believe Autodesk stock is overvalued and would not recommend buying the group's stock at this point in time. A good entry point would be at least 10% below our target (full value) price for Autodesk of $104.10. So we would see a good entry point around $94 or below.