WEBULL

Is Slower Growth And Flat Margins Altering The Investment Case For Autodesk (ADSK)?

Simply Wall St · 01/05 02:18
  • Recent commentary on Autodesk highlights that, while the company has grown revenue at a 13.5% annual rate over the past five years, its growth trails broader software peers and rising sales and marketing costs are not yet translating into proportional revenue gains.
  • Flat operating margins over the last couple of years suggest Autodesk may be struggling to convert its expanding product footprint and industry presence into improved profitability.
  • Next, we’ll explore how concerns about Autodesk’s static operating margins affect the existing investment narrative built around AI-driven margin expansion.

Uncover the next big thing with financially sound penny stocks that balance risk and reward.

Autodesk Investment Narrative Recap

To own Autodesk, you need to believe its design and construction software can keep compounding subscription revenue while AI tools eventually lift margins. The latest figures, showing revenue growth below software peers and flat operating margins, challenge the near term narrative of AI-driven efficiency gains, but do not yet fundamentally alter the core thesis or the key risk that rising sales and marketing spend may not earn an adequate return.

Against this backdrop, Autodesk’s ongoing share repurchase program, with about US$2,185.2 million spent to retire 8,019,600 shares since 2022, stands out as the most relevant recent development, as it amplifies the impact of any future margin improvement per share but also raises the stakes if profitability remains constrained and growth stays below sector norms.

Yet behind Autodesk’s AI story, investors should be aware that intensifying low cost and open source competition could still...

Read the full narrative on Autodesk (it's free!)

Autodesk's narrative projects $9.3 billion revenue and $2.0 billion earnings by 2028. This requires 12.0% yearly revenue growth and a $1.0 billion earnings increase from $1.0 billion today.

Uncover how Autodesk's forecasts yield a $366.13 fair value, a 28% upside to its current price.

Exploring Other Perspectives

ADSK 1-Year Stock Price Chart
ADSK 1-Year Stock Price Chart

Three fair value estimates from the Simply Wall St Community span roughly US$283.62 to US$366.13 per share, underscoring how far apart individual views can be. You should weigh those opinions against concerns about Autodesk’s slower revenue growth and flat operating margins, and consider how differing expectations on AI driven efficiency could shape the company’s longer term performance.

Explore 3 other fair value estimates on Autodesk - why the stock might be worth just $283.62!

Build Your Own Autodesk Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your Autodesk research is our analysis highlighting 3 key rewards that could impact your investment decision.
  • Our free Autodesk research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Autodesk's overall financial health at a glance.

Contemplating Other Strategies?

Our daily scans reveal stocks with breakout potential. Don't miss this chance:

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.