Autodesk — Stock Performance, Technical View & Future Expectations
Hi everyone! I’m Andy from Tradematics. Let’s check out the recent performance & future expectations of Autodesk. The company reported $460 million of free cash flow. Despite the fact, that company’s numbers within financials grew, it missed the estimations of for example, revenue and EPS, which caused the share price to drop by 10 % almost immediately after the report was shared by Autodesk. The question is, how long will the numbers be red?
Autodesk announced its fiscal 2023 third quarter results on November 22, 2022. Q3 revenue grew 14% year-over-year. The software company reported GAAP diluted EPS of $0.91, and Non-GAAP diluted EPS of $1.70.
Total Revenue*: $1.28 billion — 14% up year-over-year
Key Business Drivers:
• Architecture, Engineering and Construction: 575 million
• Manufacturing: 254 million
• Media & Entertainment: 78 million
Gross Profit: 1.16 million — up 14% year-over-year
Net Income: $198 million — up 44.5% year-over-year
*three months ended October 31 (unaudited)
Recent Performance
The revenue is, as in every recent financial report, affected by unusual currency fluctuation. This fact has recently an impact on every international company. The GAAP operating income was $256 million, compared to $193 million in the third quarter last year. Operation margin was 20%. Additionally, the board approved $5 billion share repurchase authorization and the cash flow from operating activities was $469 million.
At first sight, these data indicates Autodesk’s great effort and the performance seems noticeable. However, soft guidance posted shares lower in hours after the report was released. While the revenue matched analysts estimates, subscription net revenue was reported at $1.19 billion, missing the prediction of $1.21 billion. The company also missed the EPS by $0.03, which was the analysts consensus.
Stock Technical View
Due the numbers previously mentioned, Autodesk’s shares dropped 10% premarket. As you can see in the chart below, there is an Autodesk’s (ADSK) performance during the last two years. The “E” letters in the bottom, by the volume, indicates when the earning reports were announced. Especially the last year’s Q3 report was significant. The volume was extensive and the stock lost nearly quarter of its value as the company delivered underperformance and missing vast estimates, which even reflected the relative strength index. However, the stock did not lost a weighty part of its value due the microeconomic pressures. Since February, when the war on Ukraine begun, the stock lost maximum of 35% and now is consolidating on approximately 24% down on the level of $197 per share.
The RSI is currently 42.45 points, which may indicate a movement downward for a while. The all-time-high was nearly $345 and the peak was in August 2021. Since then, ADSK is 42.8% down. The technical analysis section on tradingview.com recommends sell in one week period according to the technical parameters as are “bull bear power”; “exponential moving average”; and “volume weighted moving average” etc. Moving averages are on strong sell — 14 to 1 to 0 (sell, neutral, buy). The average volume of this particular stock is 1,616,789 and currently the volume is 6,274,813, which means that investors are highly affected by the recent ADSK financial statements of Q3.
Autodesk’s Future
Even though, the company missed the financial numbers, which caused the stock price to go down by 10%, the market potential is immense. Autodesk is an international company, which main product category aims at 3D graphics tools. The global market size of this field was $9.5 billion in 2020 and the expected CAGR rate in the next eight years is 6.4%.
This rate may not seem high enough, but there are several categories attached to this segment. The most intertwined one is augmented reality or AR. The thing is that it is fast growing segment, which had a global market size of $25.3 billion and the expectations for the year of 2030 touches $600 billion.
Another segment is called internet of things. According to wikipedia, IoT describes physical objects with sensors, softwares and other technologies that connect and exchange data with other devices and systems over the internet. The annual revenue was $181.5 in the 2020 and the expected revenue in 2030 is expected to be over $621 billion. In other words, 3D modeling softwares will be adopted in higher rates in the future, which will create demand in this particular field, which causes greater numbers in the Autodesk’s financials.
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