Autodesk ADSK is scheduled to report its fourth-quarter fiscal 2025 results on Feb. 27.

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

The company anticipates revenues between $1.62 billion and $1.64 billion for the fiscal fourth quarter. The Zacks Consensus Estimate for the same is pegged at $1.63 billion, suggesting growth of 11.01% from the year-ago quarter.

Autodesk projects non-GAAP earnings in the band of $2.10-$2.16 per share. The Zacks Consensus Estimate for the same is pegged at $2.13 per share, unchanged over the past 60 days. The figure indicates a 1.91% year-over-year rise.

In the last reported quarter, Autodesk delivered an earnings surprise of 2.84%. Markedly, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.65%.

Let us see how things are shaping up for the upcoming announcement.

Factors to Consider

Autodesk implemented its new transaction model in Western Europe in the third quarter and in Japan in November. It is a shift from a reseller-based sales model to a direct customer billing system. This change is aimed to have created a direct relationship between Autodesk and its customers, through data-driven interactions, a predictable financial model, and self-service capabilities. 

Although the company expects its revenues to grow in fiscal 2025, the fourth quarter is likely to have seen margin pressure due to accounting change as a result of the new transaction model. The accounting change is expected to have resulted in higher operating expenses and a lower operating margin percent in the quarter under review, which might have hurt the bottom line in the fourth quarter.

The company reported an impressive year-over-year growth in subscription revenues in the third quarter. Its net revenue retention rate was reported in the range of 100-110%, which reflected that existing customers are renewing at strong rates. This momentum is likely to have continued in the to-be-reported quarter, directly benefiting the top line in the fourth quarter. 

However, challenges due to macroeconomic, policy and geopolitical headwinds may result in slower customer acquisition, which is expected to have been offset by the strong renewal rates in the quarter under review.

Autodesk is benefiting from favourable momentum in its AutoCAD, AEC, and Manufacturing segments following significant growth reported in the third quarter. The momentum is driven by customers consolidating Autodesk’s solutions to connect and optimize workflows via the cloud. The manufacturing sector is also seeing strong demand for Autodesk Fusion, which is driving higher attach rates and higher average sales prices. This is expected to have positively impacted the top line in the fourth quarter through a high rate of subscription renewals, EBAs by firms like Bouygues and Surbana Jurong in the third quarter and increased adoption of Autodesk’s solutions.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not exactly the case here.

Autodesk currently has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Six Flags Entertainment Corporation FUN currently has an Earnings ESP of +80.57% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

FUN shares have jumped 16.3% in the trailing 12 months. It is set to report its fourth-quarter 2024 results on Feb. 27.

NCR Voyix Corporation VYX currently has an Earnings ESP of +142.86% and a Zacks Rank #3.

VYX shares have dropped 18.8% in the trailing 12 months. It is slated to report its fourth-quarter 2024 results on Feb. 27.

Opera Limited OPRA has an Earnings ESP of +8.70% and a Zacks Rank #3 at present.

OPRA shares have jumped 67.0% in the trailing 12 months. Opera Limited is scheduled to report its fourth-quarter 2024 results on Feb. 27.

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Autodesk, Inc. (ADSK) : Free Stock Analysis Report

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NCR Voyix Corporation (VYX) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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