On Monday, JPMorgan (NYSE:JPM) adjusted its stock price target for Autodesk (NASDAQ:ADSK), a leader in 3D design, engineering, and entertainment software, increasing it to $300 from the previous $245. The firm has maintained a Neutral rating on the stock.
According to InvestingPro data, analyst targets for Autodesk range from $245 to $375, with 15 analysts recently revising their earnings expectations upward for the upcoming period. This change comes after Autodesk reported a third-quarter earnings beat, with higher-than-expected profits and free cash flow (FCF).
The company's impressive gross profit margin of 92% and last twelve months revenue of $6 billion demonstrate its strong financial position. Moreover, the company has raised its fiscal year 2025 guidance, reflecting the successful launch of its new transaction model and reiterated its fiscal year 2026 FCF goal of $2.05 billion at the midpoint.
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Autodesk's business momentum remains steady, mirroring the trends seen in previous quarters. The company continues to experience strong renewal rates, although it faces challenges in growing new business.
Despite these headwinds, Autodesk hinted at staying at the lower end of its long-term revenue growth algorithm, which ranges between 10-15%. The slower growth is attributed to macroeconomic factors and external challenges that have gradually impacted the business over recent years.
In terms of profitability, Autodesk aims to achieve the midpoint of its fiscal year 2026 non-GAAP operating margin target, which is set between 38% and 40%, by fiscal year 2025. This is a year ahead of the initial schedule. The company's financial targets are expected to be updated in the future to reflect the impacts of the new transaction model.
Furthermore, Autodesk announced the appointment of Janesh Moorjani as the new Chief Financial Officer, effective December 16. The company also mentioned that it is unlikely to hold an investor day in the spring of 2025. The revised price target by JPMorgan, set for December 2025, reflects these developments and the firm's outlook on the company's financial prospects.
Despite the higher price target, the neutral stance suggests that JPMorgan sees limited upside potential for Autodesk's shares at this time. InvestingPro analysis indicates the stock is currently fairly valued, with a notable 45% price gain over the past six months despite an 8.6% decline in the past week.
In other recent news, Autodesk, the software company, has been receiving positive attention from various analyst firms. UBS initiated coverage on Autodesk with a Buy rating, citing potential for 10% or more increase in revenue due to hiring and volume expectations. BMO (TSX:BMO) Capital Markets, Piper Sandler, Rosenblatt Securities, Mizuho (NYSE:MFG) Securities, and Oppenheimer also revised their price targets, reflecting the company's strong financial performance.
Autodesk's recent quarterly earnings showed an 11% year-over-year increase, with Non-GAAP earnings per share of $2.17 surpassing estimates. The company's new transaction model is anticipated to contribute about $270 million to billings, adding 5.0-5.5 percentage points to the overall figures.
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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