Autodesk ADSK shares have plunged 10% in the past six months, underperforming the Zacks Internet - Software industry and the S&P 500 index’s decline of 0.5% and 6.4%, respectively. However, the stock has slightly outperformed the Zacks Computer and Technology sector’s decline of 10.2% in the same time frame.

The company’s near-term performance is being weighed down by the introduction of its new transaction model, which has impacted billings and revenue recognition. At the same time, the company is undergoing a significant restructuring, including workforce reductions, that has introduced short-term disruption. Combined with broader macroeconomic uncertainty, these factors have created headwinds. Let’s explore the key drivers to assess whether investors should hold on to the stock or let it go.

Factors Driving Autodesk’s Growth

Autodesk is making solid progress in high-growth segments like Construction and Manufacturing. The company added nearly 400 new construction customers in the fourth quarter of fiscal 2025 and is seeing strong adoption of its cloud-based platforms like Fusion and Forma. These offerings support end-to-end workflows, helping customers increase productivity, reduce costs, and streamline operations.

Additionally, Autodesk is investing in AI to enhance product capabilities and user efficiency. Tools like the AutoConstrain feature in Fusion, which simplifies sketching through AI-driven suggestions, are already gaining traction. The company’s strategic focus on converging design and manufacturing workflows positions it well to serve evolving industry needs and expand its long-term customer base.

Factors Weighing on Autodesk

Despite its strong market position, Autodesk faces intense competition across its core verticals. In AEC, it contends with Trimble’s TRMB SketchUp, and in manufacturing, Dassault Systemes DASTY and Siemens SIEGY are competitors. Trimble offers specialized tools tailored to infrastructure and architectural design, whereas heavyweights like Dassault Systemes and Siemens are deeply embedded in enterprise engineering workflows. Shares of Siemens have gained 4% in the past six months, while Trimble and Dassault Systemes have lost 7.9% and 0.6%, respectively.

Further, Autodesk’s ongoing business model shift, from perpetual licenses to cloud-based subscriptions, continues to pressure top-line growth. At the same time, higher operating expenses and restructuring-related costs are weighing on profitability. While cost-cutting offers temporary relief, sustained earnings improvement will ultimately depend on Autodesk’s ability to drive meaningful revenue growth over time.

Autodesk’s Guidance and Estimate Revisions

ADSK expects non-GAAP earnings per share in the range of $2.14-$2.17 and revenues in the band of $1.60-$1.61 billion in the first quarter of fiscal 2026.

The Zacks Consensus Estimate for ADSK’s first-quarter fiscal 2026 earnings is currently pegged at $2.14 per share, which has remained unchanged over the past 30 days. The estimate suggests year-over-year growth of 14.44%. The consensus mark for revenues is pegged at $1.61 billion, indicating a year-over-year increase of 13.32%.

ADSK beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average surprise being 5.73%.

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

Conclusion: Hold ADSK Stock for Now

While Autodesk faces near-term challenges, including restructuring-related disruption, a shift in its business model, and mounting competition, it continues to show promise in key growth areas like cloud, AI, and construction. However, investors should remain cautious. A significant portion of Autodesk’s revenues comes from international operations, making it vulnerable to foreign currency fluctuations. With the U.S. dollar strengthening in early 2025, and likely to remain elevated, currency headwinds may pressure top-line performance. Given these mixed signals, holding the stock appears to be the most balanced approach for now.

Autodesk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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