Autodesk
ADSK
$212.40
+0.37%
Autodesk Inc. is a multinational software corporation that provides design, engineering, and entertainment software solutions, with its flagship AutoCAD product pioneering the computer-aided design (CAD) industry. The company serves diverse verticals including architecture, engineering, construction, manufacturing, and media & entertainment, holding a dominant market position as a legacy leader in design software. Currently, the investor narrative centers on Autodesk's transition to a subscription-based model and its integration of AI-driven capabilities, which has fueled revenue growth but also raised concerns about near-term execution and competitive pressures from emerging cloud-based design tools. Recent earnings beats have been overshadowed by year-to-date stock underperformance, reflecting a broader market debate about the sustainability of its growth and the strategic impact of AI investments.…
ADSK
Autodesk
$212.40
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Investment Opinion: Should I buy ADSK Today?
Based on the analysis, ADSK is rated a Buy. The company's strong fundamentals, including 18.4% revenue growth, high gross margins of 90.98%, and robust free cash flow of $2.729 billion, support a positive outlook. The analyst consensus is Strong Buy with an average target price of $315.37, implying a 44.7% upside from the current price of $217.90. The forward P/E of 15.33x is attractive, and the company's dominant market position in design software provides a competitive moat.
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ADSK 12-Month Price Forecast
The AI assessment is bullish with medium confidence. Autodesk's strong fundamentals, including robust revenue growth and cash flow, support a positive outlook. The forward valuation is attractive, and analysts see significant upside. However, the stock's recent underperformance and high beta warrant caution. If the company can demonstrate that AI investments are driving growth and margin expansion, the stock could re-rate higher. Conversely, if growth decelerates or margins compress, the bear case could materialize. Key developments to watch include quarterly earnings, AI product launches, and competitive dynamics.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Autodesk's 12-month outlook, with a consensus price target around $315.37 and implied upside of +48.5% versus the current price.
Average Target
$315.37
0 analysts
Implied Upside
+48.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$221 - $456
Analyst target range
The consensus average target price of $315.37 represents a 44.7% upside from the current price of $217.90, which is a substantial expected return. This bullish sentiment is supported by the fact that no analysts have a Sell rating, and the majority have Buy or Overweight ratings. The high target of $456.00 assumes that Autodesk will successfully execute its AI strategy and achieve accelerated revenue growth, while the low target of $220.50 suggests a scenario where the company faces increased competition or macroeconomic headwinds. The recent earnings beat and raised guidance have not prevented the stock from declining, indicating that investors may be focusing on other factors such as the company's AI investments and their potential impact on margins. The institutional ratings data shows that most firms have maintained their ratings without recent upgrades or downgrades, suggesting a stable but cautious outlook. Overall, the analyst community appears confident in Autodesk's long-term prospects, but the wide range of targets reflects the uncertainty surrounding its near-term performance.
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Bulls vs Bears: ADSK Investment Factors
Autodesk presents a mixed picture: strong fundamentals with double-digit revenue growth, high margins, and robust cash flow, yet the stock has underperformed significantly, down 31.9% over the past year. The bull case rests on the company's dominant market position, successful subscription transition, and attractive forward valuation, while the bear case centers on high trailing valuation, liquidity concerns, and uncertainty around AI investments. Currently, the bearish sentiment appears stronger in the short term, as evidenced by the stock's decline despite earnings beats. The most critical tension is whether Autodesk can reaccelerate revenue growth and demonstrate that AI investments will drive future profitability, which would justify the analyst targets and reverse the stock's downward trend.
Bullish
- Strong Q2 earnings beat: Autodesk reported Q2 FY2027 earnings of $2.33 per share, significantly beating estimates, with revenue of $1.934 billion, up 18.4% year-over-year. This demonstrates robust demand for its subscription-based design software across architecture, engineering, and construction verticals.
- High gross margin and profitability: Gross margin stands at 90.98%, reflecting the highly scalable software business model. Operating margin is 24.9%, and net margin is 15.6%, indicating strong conversion of revenue to profit despite ongoing investments in AI and cloud capabilities.
- Robust free cash flow generation: Trailing twelve-month free cash flow is $2.729 billion, with quarterly FCF of $876 million. This cash generation supports share repurchases ($448 million in the quarter) and internal funding for growth initiatives, reducing reliance on external capital.
- Analyst consensus strong buy: With 34 analysts, the consensus rating is Strong Buy (mean score 1.5), and the average target price of $315.37 implies a 44.7% upside from the current price of $217.90. No analysts have a Sell rating, reflecting confidence in the company's long-term prospects.
Bearish
- Stock underperforming despite beats: Despite Q2 earnings beat and raised guidance, the stock has fallen 19.5% in just over a week (from $270.58 to $217.90) and is down 31.9% over the past year. This disconnect suggests investors are focused on concerns beyond near-term results, such as AI investment impact on margins.
- High valuation on trailing earnings: The trailing P/E of 47.89x is elevated compared to the broader market, and the PEG ratio of 22.51x indicates that the stock is expensive relative to its near-term growth rate. This leaves little room for error if growth decelerates.
- Liquidity concerns from current ratio: The current ratio of 0.851 indicates that current liabilities exceed current assets, which could pose liquidity risks if the company faces unexpected cash needs. While common for subscription businesses, it warrants monitoring.
- High beta and market sensitivity: With a beta of 1.298, ADSK is more volatile than the market. In the recent market downturn, the stock declined more than the S&P 500, and its relative strength over the past year is -50.5%, showing significant underperformance.
ADSK Technical Analysis
Key support is at the 52-week low of $185.50, which was established in late June 2026, while immediate resistance lies at the recent high of $270.58 from August 27, 2026. A break below the $185.50 support could signal a continuation of the downtrend, potentially leading to further downside, while a move above $270.58 would indicate a reversal and a test of the 52-week high of $329.09. The stock's beta of 1.298 indicates higher volatility than the market, meaning that during market downturns, ADSK is likely to decline more than the S&P 500, and during upswings, it may outperform. The current price is 17.5% above the 52-week low, suggesting that while the stock is near the bottom of its range, there is still room for further decline if support fails. The recent sharp drop from $270.58 to $217.90, a 19.5% decline in just over a week, highlights the stock's sensitivity to negative news and its high beta nature.
Beta
1.31
1.31x market volatility
Max Drawdown
-42.6%
Largest decline past year
52-Week Range
$186-$327
Price range past year
Annual Return
-34.5%
Cumulative gain past year
| Period | ADSK Return | S&P 500 |
|---|---|---|
| 1m | -14.9% | -1.1% |
| 3m | +7.0% | +3.0% |
| 6m | -15.4% | +15.4% |
| 1y | -34.5% | +16.2% |
| ytd | -25.9% | +12.1% |
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ADSK Fundamental Analysis
Autodesk's balance sheet shows a debt-to-equity ratio of 0.898, indicating moderate leverage, with total debt to capitalization at 46.07%. The company generated strong free cash flow of $876 million in the latest quarter, contributing to a trailing twelve-month free cash flow of $2.729 billion. This robust cash generation supports internal funding for growth initiatives and share repurchases, with $448 million spent on buybacks in the quarter. The current ratio of 0.851 suggests potential liquidity concerns, as current liabilities exceed current assets, but this is common for subscription-based software companies with predictable recurring revenue. Return on equity is an impressive 36.91%, reflecting efficient use of shareholder capital, while return on assets stands at 11.47%, indicating effective asset utilization. The company's cash flow from operations of $893 million in the quarter comfortably covers its capital expenditures of $17 million, demonstrating a high-quality earnings stream.
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?
Historically, Autodesk's valuation has been volatile, with the trailing P/E ranging from a low of 25.43x in Q1 FY2027 to a high of 152.31x in Q4 FY2022. The current trailing P/E of 47.89x is in the middle of this historical range, suggesting that the stock is not at extreme valuation levels. However, the price-to-sales ratio of 7.47x is near the lower end of its historical range, which has fluctuated between 25.86x and 66.65x over the past five years. This indicates that the market is currently assigning a lower multiple to Autodesk's sales, possibly reflecting concerns about growth sustainability or competitive pressures. The forward P/E of 15.33x is at a historical low, implying that the market expects significant earnings growth in the coming year, which may be overly optimistic given the recent slowdown in revenue growth.
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 and operational risks include moderate leverage with a debt-to-equity ratio of 0.898 and total debt to capitalization at 46.07%, which could strain cash flows if interest rates rise. The current ratio of 0.851 indicates potential liquidity issues, though recurring revenue provides some cushion. Revenue growth, while strong at 18.4% YoY, has shown some deceleration in recent quarters, and the company's high gross margin of 90.98% leaves limited room for improvement, making it vulnerable to cost inflation. Additionally, the company's heavy investment in AI and cloud infrastructure may pressure operating margins, which currently stand at 24.9%, if these investments do not yield expected returns.
FAQ
The key risks of holding ADSK include: 1) Financial risk from moderate leverage (debt-to-equity of 0.898) and a current ratio below 1, which could strain liquidity. 2) Competitive risk from emerging cloud-based design tools that could erode market share. 3) Macro risk due to high beta (1.298), making the stock sensitive to market downturns. 4) Company-specific risk that AI investments may not generate expected returns, pressuring margins. The most severe risk is a prolonged growth slowdown, which could lead to a de-rating of the stock's valuation.
The 12-month forecast for ADSK is positive, with a base case target of $315.37 (44.7% upside) and a bull case target of $456 (109% upside). The bear case target is $220.50 (1.2% upside), reflecting downside risks. The base case has a 50% probability, assuming steady revenue growth and stable margins. The bull case (30% probability) requires successful AI execution and accelerated growth, while the bear case (20% probability) involves competitive pressures and margin compression. Overall, the most likely scenario is a gradual recovery towards the analyst average target.
ADSK's valuation is mixed. On a trailing basis, the P/E of 47.89x is high, but the forward P/E of 15.33x is at a historical low, suggesting the market expects significant earnings growth. The price-to-sales ratio of 7.47x is near the lower end of its historical range, indicating that the stock is not overvalued relative to its sales. Compared to peers, ADSK trades at a premium on trailing earnings but at a discount on forward earnings, reflecting optimism about future growth. Overall, the stock appears fairly valued to slightly undervalued, with the market pricing in a recovery in earnings.
ADSK is a good buy for investors with a long-term horizon, given its strong fundamentals and attractive forward valuation. The stock trades at a forward P/E of 15.33x, which is historically low, and analysts see a 44.7% upside to the average target of $315.37. However, the stock has been volatile, with a beta of 1.298, and has underperformed the market over the past year. The main risk is that AI investments may not yield immediate returns, but the company's dominant market position and robust cash flow provide a margin of safety. For risk-tolerant investors, ADSK offers a compelling risk/reward profile.
ADSK is better suited for long-term investment due to its growth stage and volatility. The company is investing heavily in AI and cloud, which may take several years to yield returns. With a beta of 1.298, the stock is more volatile than the market, making it risky for short-term trading. The company does not pay a dividend, so returns depend on capital appreciation. Given the strong fundamentals and attractive forward valuation, a minimum holding period of 3-5 years is recommended to allow the AI strategy to play out and the stock to re-rate.