Autodesk Falls After-Hours, As Soft Guidance Offsets Earnings Beat
ADSK) dropped 2.6% in Tuesday’s after-hours trading as the design and software specialist posted a solid earnings beat- but issued disappointing guidance for the third quarter.” data-reactid=”12″>Shares in Autodesk (ADSK) dropped 2.6% in Tuesday’s after-hours trading as the design and software specialist posted a solid earnings beat- but issued disappointing guidance for the third quarter.
Specifically, Q2 Non-GAAP EPS of $0.98 beat Street expectations by $0.08 while GAAP EPS of 0.44 also scraped past Street estimates by $0.01. Meanwhile revenue surged 14.6% year-over-year and beat consensus forecasts by $11.34M, while non-GAAP operating margin came in at 29% vs consensus of 27.3%.
Looking ahead to Q3, Autodesk is now guiding for $930-945M in revenue and $0.91-0.97 EPS- which fell towards the low-range of Street expectations heading into the price of $940.3M revenue and $0.95 EPS.
At the same time, the high end of the FY2021 billings guidance was lowered by ~ $70M, partially attributable to fewer multi-year contracts- although both FY2021 revenue and EPS guidance midpoints were above consensus. For FY2021, the FCF guidance is unchanged at $1,300–1,400M, compared to the $1,344M consensus.
“We delivered a strong second quarter as a result of our resilient business model and strategic nature of our products,” said Andrew Anagnost, Autodesk CEO. “Our cloud-based solutions are helping our customers stay productive in the current environment, and have resulted in expanded relationships and usage of our products.”
Koji Ikeda, earning highlights included: 1) Subscription Plan revenue growth of 27% y/y; 2) expanding operating margins; and 3) good free cash flow generation.” data-reactid=”21″>Indeed, for Oppenheimer analyst Koji Ikeda, earning highlights included: 1) Subscription Plan revenue growth of 27% y/y; 2) expanding operating margins; and 3) good free cash flow generation.
He reiterated his buy rating on the stock on August 26 with a $300 price target. “In our assessment, the businesses executed well in F2Q that will likely be the trough demand quarter for Autodesk’s end-markets during the pandemic” Ikeda commented.
While guidance could be viewed as uninspiring, he noted that the midpoint was raised, and the overall range narrowed, suggesting visibility has improved, a positive.
See ADSK stock analysis on TipRanks).” data-reactid=”24″>Net-net “We believe the F2Q results lend support to our upgrade thesis that digitization cycles in Autodesk’s end-markets are accelerating, that should help drive the business towards its FY2023 financial targets (~$2.4B in FCF, etc.).” (See ADSK stock analysis on TipRanks).
price target stands at $243, indicating 4% downside potential from current levels, with shares already up 38% year-to-date.” data-reactid=”25″>Turning to the rest of the Street, Autodesk shows a cautiously optimistic Moderate Buy analyst consensus, with 12 recent buy ratings, 2 hold ratings and 2 sell ratings. The average analyst price target stands at $243, indicating 4% downside potential from current levels, with shares already up 38% year-to-date.
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