Autodesk
ADSK
$203.50
-3.62%
Autodesk is a multinational software company that pioneered computer-aided design (CAD) with its AutoCAD product, now providing design software for architecture & construction, manufacturing, and media & entertainment. As a market leader in design software, its products have been used in iconic landmarks like Burj Khalifa and major film titles like Avatar. The current investor narrative centers on Autodesk's transition to a subscription-based model, its AI strategy, and recent earnings beats that have been overshadowed by concerns about near-term execution and competitive pressures from peers like Adobe.…
ADSK
Autodesk
$203.50
Related headlines
Investment Opinion: Should I buy ADSK Today?
Rating: Buy. Autodesk is a high-quality software company with accelerating revenue growth, expanding margins, and a forward valuation that appears deeply discounted. The consensus analyst rating is Strong Buy with an average target of $318.30, implying 45.8% upside. The core thesis is that the market is underestimating the earnings power from the subscription transition and operating leverage.
Supporting evidence: Revenue grew 18.43% YoY to $1.934B, EPS surged 228% to $2.33, operating margin improved to 27.97%, and free cash flow yield is ~5.1%. The forward P/E of 15.31x is a 56% discount to the software industry average of 35x, while the trailing P/E of 47.89x reflects past earnings. The P/S ratio of 7.47x is below the historical average of ~35x, suggesting value. With $2.67B in cash and strong cash flow, the balance sheet is solid.
Risks & Conditions: The biggest risks are execution on AI strategy, potential revenue deceleration, and macro headwinds compressing multiples. This Buy rating would be downgraded to Hold if revenue growth falls below 10% or if the forward P/E expands above 25x without earnings catching up. It would be upgraded if the stock breaks above its 52-week high of $329.09. Overall, Autodesk appears undervalued on a forward basis relative to its growth trajectory and industry peers.
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ADSK 12-Month Price Forecast
The AI assessment is bullish with medium confidence. Autodesk's fundamental momentum is strong, with accelerating revenue, massive EPS growth, and expanding margins. The forward valuation is deeply discounted, suggesting the market is overly pessimistic. However, the stock's technical downtrend and execution risks temper confidence. Key developments to watch are the next earnings report and AI product announcements. If growth sustains and margins improve, the stock could re-rate significantly. If not, the bear case could materialize. Overall, the risk/reward is favorable for long-term investors.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Autodesk's 12-month outlook, with a consensus price target around $318.30 and implied upside of +56.4% versus the current price.
Average Target
$318.30
0 analysts
Implied Upside
+56.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$235 - $456
Analyst target range
Autodesk is covered by 32 analysts, with a consensus recommendation of 'strong buy' (mean rating 1.38 on a 1-5 scale). The average target price is $318.30, implying approximately 45.8% upside from the current price of $218.35. The distribution shows 0 holds and 0 sells, indicating strong bullish sentiment. The target range spans from a low of $235.00 to a high of $456.00. The high target of $456.00 assumes significant multiple expansion and accelerating growth, possibly driven by AI integration and market share gains. The low target of $235.00 still implies 7.6% upside, suggesting even the most bearish analyst sees some value. Recent ratings from firms like Rosenblatt (Buy), Piper Sandler (Overweight), and RBC Capital (Outperform) confirm positive sentiment, with no downgrades in the last two months. The wide spread between low and high targets ($221) indicates high uncertainty, but the consensus remains firmly bullish.
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Bulls vs Bears: ADSK Investment Factors
Autodesk presents a compelling bull case with accelerating revenue growth, massive EPS expansion, and a forward P/E that appears deeply discounted relative to peers. The unanimous analyst buy rating and 45.8% upside to the average target support the bullish thesis. However, the stock is in a sustained downtrend, with a high trailing P/E and concerns about AI strategy and execution weighing on sentiment. The single most important tension is whether the forward P/E discount reflects a genuine value opportunity or a value trap—if earnings growth decelerates, the stock could fall further; if growth sustains, the upside is substantial. Currently, the bull case has stronger evidence due to the fundamental momentum and analyst support, but the bearish technicals and sentiment cannot be ignored.
Bullish
- Strong Revenue Growth Acceleration: Q1 2027 revenue grew 18.43% YoY to $1.934B, accelerating from 7.5% YoY in Q1 2026. This indicates strong demand across AEC, AutoCAD, and Manufacturing segments, with the largest AEC segment at $970M.
- Massive EPS Expansion and Margin Improvement: EPS surged from $0.71 in Q1 2026 to $2.33 in Q1 2027, a 228% increase. Operating margin expanded to 27.97% from 20.70% a year ago, showing operating leverage from the subscription model.
- Compelling Forward Valuation: Forward P/E of 15.31x is a 56% discount to the software industry average of 35x, implying the market expects significant earnings growth. This creates a potential value opportunity if growth sustains.
- Strong Free Cash Flow Generation: Free cash flow was $876M in Q1 2027, yielding approximately 5.1% of market cap. With $2.67B in cash and moderate debt-to-equity of 0.90, the balance sheet supports investment and buybacks.
Bearish
- Sustained Price Downtrend: Stock is down 25.26% over 1 year and trading at 66.3% of its 52-week range, closer to the low of $185.50 than the high of $329.09. The 3-month and 6-month changes are -9.78% and -17.82%, indicating persistent selling pressure.
- High Trailing P/E and PEG Ratio: Trailing P/E of 47.89x is a 37% premium to the software industry average of 35x. PEG ratio of 22.51x suggests the stock is expensive relative to its growth rate, implying high expectations.
- Execution and AI Strategy Concerns: Despite a Q1 earnings beat, the stock sank, highlighting investor skepticism about near-term execution and AI strategy. Competitors like Adobe are also vying for design software market share.
- High Volatility and Macro Sensitivity: Beta of 1.318 indicates 31.8% more volatility than the market. In a rising rate environment or economic slowdown, the stock could underperform, as seen in the 42.56% max drawdown.
ADSK Technical Analysis
Autodesk is in a sustained downtrend, with a 1-year price change of -25.26% and currently trading at 66.3% of its 52-week range (current price $218.35 vs 52-week low $185.50 and high $329.09). The stock is closer to its 52-week low than its high, suggesting bearish sentiment and potential value opportunity, though the downtrend remains intact. The 1-month price change of +13.09% shows a short-term bounce, but the 3-month change of -9.78% and 6-month change of -17.82% indicate that the longer-term trend is still negative. The 1-month relative strength vs SPY is +12.78%, suggesting the stock is outperforming the market in the very near term, but this could be a dead cat bounce within a larger downtrend. The 52-week low at $185.50 provides key support, while the 52-week high at $329.09 is a major resistance level. A break above $329.09 would signal a trend reversal, while a breakdown below $185.50 could accelerate selling. Beta of 1.318 indicates the stock is 31.8% more volatile than the market, meaning larger swings in both directions, which is important for risk management.
Beta
1.32
1.32x market volatility
Max Drawdown
-42.6%
Largest decline past year
52-Week Range
$186-$329
Price range past year
Annual Return
-32.0%
Cumulative gain past year
| Period | ADSK Return | S&P 500 |
|---|---|---|
| 1m | +8.4% | +0.4% |
| 3m | -12.3% | +5.5% |
| 6m | -24.6% | +8.4% |
| 1y | -32.0% | +18.9% |
| ytd | -29.0% | +9.6% |
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ADSK Fundamental Analysis
Autodesk's revenue trajectory is growing, with Q1 2027 revenue of $1.934 billion, up 18.43% YoY from $1.633 billion in Q1 2026. The multi-quarter trend shows accelerating growth: Q2 2025 revenue was $1.505 billion, Q3 2025 $1.570 billion, Q4 2025 $1.639 billion, and Q1 2026 $1.633 billion, before jumping to $1.934 billion in Q1 2027. The Architecture Engineering and Construction segment is the largest at $970 million, followed by AutoCAD and AutoCAD LT Family at $474 million, and Manufacturing at $367 million, indicating broad-based demand. The company is highly profitable, with net income of $491 million in Q1 2027, up from $152 million in the year-ago quarter, and a gross margin of 90.95%, which is typical for software companies. Operating margin improved to 27.97% from 20.70% a year ago, showing margin expansion. Autodesk has a strong balance sheet with $2.671 billion in cash and equivalents, generating $893 million in operating cash flow and $876 million in free cash flow in Q1 2027. The debt-to-equity ratio is 0.90, indicating moderate leverage, and the current ratio of 0.85 suggests adequate liquidity. Free cash flow yield is approximately 5.1% based on market cap of $53.86 billion, which is attractive for a software company.
Quarterly Revenue
$1.9B
2026-04
Revenue YoY Growth
+18.4%
YoY Comparison
Gross Margin
91.0%
Latest Quarter
Free Cash Flow
$2.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ADSK Overvalued?
Since Autodesk has positive net income, the primary valuation metric is the P/E ratio. The trailing P/E is 47.89x, while the forward P/E is 15.31x, implying the market expects significant earnings growth in the next year. The large gap between trailing and forward P/E suggests that the market is pricing in a sharp earnings recovery, which is consistent with the recent EPS jump from $0.71 in Q1 2026 to $2.33 in Q1 2027. Compared to the software industry average P/E of approximately 35x, Autodesk's trailing P/E of 47.89x represents a 37% premium, but its forward P/E of 15.31x is a 56% discount, indicating that the market expects earnings to catch up. Historically, Autodesk's trailing P/E has ranged from 25x to 154x over the past five years. The current trailing P/E of 47.89x is near the middle of this range, suggesting it is not excessively overvalued relative to its own history. The P/S ratio of 7.47x is below the historical average of around 35x, reflecting the recent price decline, which could indicate a value opportunity if revenue growth sustains.
PE
47.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 25x~97x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
30.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Autodesk's trailing P/E of 47.89x is elevated relative to the industry average of 35x, making the stock vulnerable to multiple compression if growth disappoints. The debt-to-equity ratio of 0.90 indicates moderate leverage, and while free cash flow is strong, any disruption to subscription renewals could pressure cash flows. Revenue concentration in the AEC segment (50% of total) exposes the company to cyclical downturns in construction and infrastructure spending. Operating margin, though improving to 27.97%, is still below some software peers, and the large gap between trailing and forward P/E implies the market expects a sharp earnings recovery that may not materialize.
Market & Competitive Risks: The stock's beta of 1.318 means it is more volatile than the market, amplifying losses during downturns. The 1-year relative strength vs SPY is -43.61%, indicating severe underperformance. Competitive pressure from Adobe and other design software firms could erode market share, especially if Autodesk's AI integration lags. Regulatory risks around data privacy and intellectual property in design software could also emerge. The recent news of the stock sinking despite an earnings beat suggests that investor sentiment is fragile and that any negative macro news could trigger further selling.
Worst-Case Scenario: If revenue growth decelerates below 10% due to a recession or competitive losses, and margins fail to expand, the stock could retest its 52-week low of $185.50. In a severe downturn, the stock could fall to $170, representing a -22% decline from the current price of $218.35. This scenario would be driven by multiple compression (P/E falling to 35x) and earnings disappointment, potentially exacerbated by short sellers. The historical max drawdown of -42.56% suggests that in extreme cases, losses could be even larger.
FAQ
The key risks are: 1) Execution risk on AI strategy and subscription growth—if AI integration fails, customer churn could increase. 2) Macroeconomic risk—the stock's beta of 1.318 makes it sensitive to economic downturns, and a recession in construction could hurt AEC revenue. 3) Competitive risk from Adobe and other design software firms, which could pressure market share. 4) Valuation risk—the trailing P/E of 47.89x leaves little room for error; any earnings miss could trigger multiple compression. The most severe risk is a growth deceleration below 10%, which could push the stock to $185.50 or lower, representing a -15% decline from current levels.
The 12-month forecast is cautiously bullish. The base case (50% probability) sees the stock trading between $235 and $280, driven by steady revenue growth of 12-15% and gradual margin expansion. The bull case (30% probability) targets $280-$330, fueled by successful AI integration and accelerating growth. The bear case (20% probability) sees the stock falling to $185-$220 if growth decelerates or macro headwinds intensify. The most likely scenario is the base case, with the stock moving toward the analyst average target of $318.30 over time, but near-term headwinds may keep it in the $235-$280 range. Key assumptions include sustained revenue growth above 12% and no major competitive disruption.
ADSK appears undervalued on a forward basis but overvalued on a trailing basis. The trailing P/E of 47.89x is a 37% premium to the software industry average of 35x, suggesting the stock is expensive based on past earnings. However, the forward P/E of 15.31x is a 56% discount to the industry, implying the market expects significant earnings growth. The P/S ratio of 7.47x is well below the historical average of ~35x, indicating potential value. The PEG ratio of 22.51x is high, but this is distorted by the low trailing EPS. Overall, the valuation implies the market is pricing in a sharp earnings recovery. If that recovery materializes, the stock is undervalued; if not, it could be a value trap.
From a risk/reward perspective, ADSK appears attractive for investors with a medium-term horizon. The stock offers 45.8% upside to the average analyst target of $318.30, supported by accelerating revenue growth (18.43% YoY) and a forward P/E of 15.31x that is a 56% discount to the software industry. However, the stock is in a downtrend and has high volatility (beta 1.318). The biggest downside risk is a deceleration in growth or failed AI execution, which could push the stock to the 52-week low of $185.50. For growth-oriented investors willing to tolerate short-term volatility, ADSK is a good buy at current levels. Value investors may also find the forward P/E compelling. Conservative investors should wait for a confirmed trend reversal above $235.
ADSK is more suitable for long-term investment (12-24 months or more) due to its growth stage, high volatility (beta 1.318), and the time needed for its AI strategy and subscription model to fully play out. The stock pays no dividend, so total return depends on price appreciation. Short-term trading is risky given the sustained downtrend and short ratio of 2.53 days, which could lead to sharp moves. For long-term investors, the forward P/E of 15.31x and strong free cash flow provide a margin of safety. A minimum holding period of 12 months is recommended to allow the earnings recovery to materialize and the market to re-rate the stock.
