On Monday, UBS initiated coverage on Autodesk (NASDAQ:ADSK), a software company listed on NASDAQ:ADSK stock, with a Buy rating and a price target of $350.00. The firm's analysis suggests a positive outlook for Autodesk's revenue growth and its ability to leverage pricing power and cross-selling opportunities. According to InvestingPro data, 15 analysts have recently revised their earnings estimates upward, with analyst targets ranging from $245 to $375.
The coverage begins with an optimistic view on the company's financial prospects, citing potential for a 10% or more increase in spending due to hiring and volume expectations. UBS highlighted Autodesk's pricing strategy, which includes a range of increases from low-single digits to over 10%, as a significant factor in driving revenue growth.
InvestingPro data shows the company maintains impressive gross profit margins of 92% and has achieved 11.5% revenue growth in the last twelve months.
Autodesk's new transaction model, which is expected to contribute to financial upside, was also mentioned as a likely driver of future growth. Despite some disruption from the rollout of this model, the long-term perspective remains constructive. UBS anticipates that the new model will provide tailwinds to the company's revenue.
The firm's upside scenario is based on a year-over-year revenue growth of 10% by calendar year 2025. Even in their base case scenario, UBS forecasts a 7.5% year-over-year increase, suggesting that the current market consensus may underestimate the positive revenue impact of Autodesk's new business model.
In other recent news, Autodesk has made significant strides in its financial performance and strategic transitions. The software company's recent quarterly earnings showed an 11% year-over-year increase, with Non-GAAP earnings per share of $2.17 surpassing estimates.
Autodesk's transition to a new transactional model is expected to contribute about $270 million to billings, adding 5.0-5.5 percentage points to the overall figures.
Analyst firms BMO Capital Markets, Piper Sandler, Rosenblatt Securities, Mizuho (NYSE:MFG) Securities, and Oppenheimer have taken note of these developments. BMO Capital Markets maintained its Market Perform rating but increased the price target to $308.00, while Piper Sandler lifted its target to $311, and Rosenblatt Securities upgraded its target to $325. Mizuho Securities increased its target to $280, and Oppenheimer reaffirmed a $350 target.
Janesh Moorjani, formerly of Elastic (NYSE:ESTC), has been appointed as the new Chief Financial Officer at Autodesk. His role is expected to be pivotal in shaping the company's financial narrative in the future. Autodesk aims to maintain a 10-15% growth framework over the long term and is preparing for strong free cash flow growth in fiscal 2026. These recent developments underscore Autodesk's ongoing evolution and its commitment to strategic financial planning.
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