Autodesk’s ADSK shares have risen 26.4% year to date (YTD), underperforming the broader Zacks Computer and Technology sector’s appreciation of 27.8%.

However, ADSK has outperformed the Zacks Computer – Software industry and its peers like Intuit INTU, ANSYS ANSS and Verint Systems VRNT.

In the same time frame, INTU shares have gained 4.1%, while Ansys and Verint have declined 5.7% and 13.8%, respectively. The industry has risen 16.3% YTD. 

The company’s outperformance can be attributed to the strength of the Design and Make business of Autodesk, as well as its consistent subscription renewal rate. While Design revenues increased 9% year over year to $1.26 billion, Make revenues increased 25% year over year to $162 million.

However, sluggish growth of Maintenance revenues mainly due to the migration of maintenance plans to the subscription model remains a concern. In the second quarter of fiscal 2025, Maintenance revenues declined 21.4% from the year-ago quarter to $11 million.

Autodesk, Inc. Price and Consensus

Autodesk, Inc. price-consensus-chart | Autodesk, Inc. Quote

Will Expanding Public Sector Partnership Aid ADSK’s Prospect?

Autodesk recently announced the receipt of FedRAMP Authorization at a moderate level for its government offering to provide security for the U.S. Federal Government as well as the public sector establishments. 

ADSK’s government product offering includes Autodesk Docs and Autodesk BIM Collaborate Pro to drive collaboration and document control. 

Autodesk aims to leverage its cloud collaboration capabilities and document management offering to drive digital transformation and modernize workflows in public sector entities.

Autodesk BIM Collaborate Pro will enable users to have access to model timelines to receive real-time updates of design packages to improve efficiency. 

The company also received an Authority to Operate making it deployable by federal contractors and partners on projects aiding prospects.

ADSK’s strategy to leverage secular trends resulting in digital architecture transformation leading to cloud-oriented movement in manufacturing, media and entertainment bodes well for investors. 

Autodesk’s approach to providing a durable and direct customer network aids in driving greater engineering efficiency to expand market reach and customer retention.

ADSK’s Steady Short-Term Earnings Estimates

The Zacks Consensus Estimate for ADSK’s third-quarter fiscal 2025 earnings is pegged at $2.11 per share, unchanged in the past 30 days and indicates 1.93% year-over-year growth.

The consensus mark for fiscal 2025 earnings is pegged at $8.24 per share, unchanged in the past 30 days and indicates 8.42% year-over-year growth.

Autodesk’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.94%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The consensus estimate for ADSK’s third-quarter fiscal 2025 revenues is pegged at $1.56 billion, indicating 10.51% year-over-year growth.

The consensus mark for fiscal 2025 revenues is pegged at $6.11 billion, indicating 11.07% year-over-year growth.

ADSK’s Guidance

For fiscal 2025, ADSK expects revenues between $6.08 billion and $6.13 billion. In fiscal 2024, Autodesk generated total revenues of $5.5 billion.

For fiscal 2025, ADSK expects its non-GAAP earnings per share between $8.18 and $8.31.

For the third quarter of fiscal 2025, Autodesk expects revenues between $1.555 billion and $1.57 billion. Non-GAAP earnings per share are anticipated between $2.08 and $2.14.

ADSK’s Stretched Valuation Concerns Investors

ADSK’s shares are overvalued, as indicated by a Value Score of F.

In terms of the forward 12-month Price/Earnings (P/E) ratio, ADSK is trading at 33.48X, higher than the Zacks Computer & Technology sector’s 26.54X.

Macroeconomic factors like unfavorable forex volatility, policy-related uncertainty, geopolitical tension as well as growing competition in the industry are a concern for investors. Further, softness in the media industry is a headwind. 

Autodesk currently has a Zacks Rank #4 (Sell), which implies that investors should consider staying away from the stock. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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