Autodesk
ADSK
$225.91
+7.70%
Autodesk is a multinational software company that pioneered computer-aided design (CAD) with its AutoCAD product, now providing design software for architecture & construction, manufacturing, and media & entertainment. As a market leader in design software, its products have been used in iconic landmarks like Burj Khalifa and blockbuster films like Avatar. The current investor narrative centers on Autodesk's transition to a subscription-based model, its AI strategy, and near-term execution concerns, as evidenced by a stock price decline despite a recent earnings beat and raised guidance.…
ADSK
Autodesk
$225.91
Related headlines
Investment Opinion: Should I buy ADSK Today?
Rating: Buy. Autodesk's strong earnings momentum, expanding margins, and massive analyst upside potential outweigh the bearish technicals, making it a compelling risk/reward at current levels. The consensus analyst rating is strong buy with an average target of $316.08, implying 50.7% upside.
Supporting evidence: (1) Q1 FY2027 EPS of $2.33 surged from $0.71 a year ago, driving the forward PE down to 14.7x—near historical lows. (2) Revenue grew 18.43% YoY to $1.934B, with operating margin expanding to 27.97%. (3) Free cash flow of $876 million provides a 5.1% yield, funding $448 million in buybacks. (4) The average analyst target of $316.08 offers significant upside, and the low target of $235 still implies 12% upside from current levels.
Risks & Conditions: The biggest risks are execution on AI strategy and macro headwinds compressing multiples. This Buy would upgrade to Strong Buy if the stock breaks above $235 (analyst low target) on sustained margin improvement, or downgrade to Hold if revenue growth decelerates below 10% or the stock breaks below $185.50 (52-week low). Valuation verdict: Autodesk is undervalued on a forward basis (14.7x PE) but overvalued on trailing (47.89x) and PEG (22.51x). The forward PE suggests the market is pricing in a sharp earnings rebound, which appears achievable given current trends.
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ADSK 12-Month Price Forecast
Autodesk's fundamental momentum is strong, with accelerating revenue growth, expanding margins, and robust free cash flow. The forward PE of 14.7x is attractive relative to historical levels and the software industry, but the trailing PE of 47.89x and high PEG ratio caution that expectations are elevated. The analyst consensus is overwhelmingly bullish, but the stock's technical downtrend and macro sensitivity warrant a medium confidence level. I would upgrade to high confidence if the stock breaks above $235 and sustains margin expansion; downgrade to bearish if revenue growth falls below 10% or the stock breaks below $185.50.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Autodesk's 12-month outlook, with a consensus price target around $316.08 and implied upside of +39.9% versus the current price.
Average Target
$316.08
0 analysts
Implied Upside
+39.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$235 - $456
Analyst target range
Autodesk is covered by 33 analysts, with a consensus recommendation of 'strong buy' (mean rating 1.37 on a 1-5 scale). The average price target is $316.08, implying approximately 50.7% upside from the current price of $209.75. The distribution leans heavily bullish, with recent ratings from firms like Rosenblatt (Buy), Piper Sandler (Overweight), and RBC Capital (Outperform) reaffirmed after the Q1 earnings beat. The target range spans from a low of $235.00 to a high of $456.00. The high target of $456 assumes a return to prior valuation multiples and successful execution on AI and subscription growth, while the low target of $235 suggests only modest recovery and continued margin pressure. The wide spread ($221) indicates high uncertainty about the company's growth trajectory. Recent analyst actions have been mostly reaffirmations, with no downgrades, signaling confidence in the long-term story despite the stock's decline. The strong buy consensus and significant upside potential suggest the market may be overly pessimistic, but the wide target range cautions that risks remain.
Bulls vs Bears: ADSK Investment Factors
Autodesk presents a classic tension between strong fundamentals and weak price action. On the bull side, the company delivered a stellar Q1 beat with EPS surging to $2.33, expanding margins, and robust free cash flow, while analysts see 50.7% upside to the average target of $316.08. On the bear side, the stock is in a deep downtrend, down 30% over the past year, with a trailing PE of 47.89x that looks expensive despite the forward PE of 14.7x implying aggressive earnings growth. The single most important tension is whether the market's pessimism is a buying opportunity or a warning sign: if Autodesk sustains its margin expansion and revenue acceleration, the stock could re-rate higher, but if execution falters or AI monetization disappoints, the stock could test the 52-week low of $185.50. Currently, the bull case has stronger evidence given the analyst consensus and fundamental momentum, but the bearish technicals warrant caution.
Bullish
- Strong earnings beat and raised guidance: Autodesk reported Q1 FY2027 EPS of $2.33, well above the prior year's $0.71, and raised full-year guidance. Net income surged to $491 million from $152 million, demonstrating rapid earnings growth that supports the forward PE of 14.7x.
- Massive analyst upside potential: The average analyst price target is $316.08, implying 50.7% upside from the current $209.75. With 33 analysts rating it a strong buy (1.37 mean), the consensus is heavily bullish despite the stock's decline.
- Expanding margins and strong profitability: Operating margin improved to 27.97% in Q1 FY2027 from 27.13% in Q4 FY2026, and net margin jumped to 25.4% from 16.1%. Gross margin remains high at 90.95%, typical for software, and ROE is a robust 36.9%.
- Healthy free cash flow generation: Free cash flow was $876 million in Q1 FY2027, yielding approximately 5.1% on the $53.86B market cap. The company uses FCF for share repurchases ($448 million in Q1), reducing share count and boosting EPS.
Bearish
- Stock in sustained downtrend: ADSK is down 30.34% over the past year, underperforming the S&P 500 by 46.81%. The current price of $209.75 is near the 52-week low of $185.50, indicating persistent selling pressure and bearish sentiment.
- Elevated trailing PE and PEG ratio: The trailing PE of 47.89x is expensive relative to the software industry average (typically 20-30x). The PEG ratio of 22.51x suggests the stock is overvalued relative to its earnings growth rate, implying high expectations.
- Revenue growth deceleration concerns: While Q1 FY2027 revenue grew 18.43% YoY, this is a deceleration from the mid-20% growth rates seen in FY2025. Sequential revenue declined from $1.957B in Q4 to $1.934B in Q1, typical seasonality but still a concern.
- Execution and AI strategy doubts: Despite a Q1 earnings beat, the stock sank, highlighting investor skepticism about near-term execution and AI monetization. The recent news suggests the market is not fully convinced of Autodesk's AI strategy.
ADSK Technical Analysis
The stock is in a sustained downtrend, with a 1-year price change of -30.34% and a 52-week range of $185.50 to $329.09. The current price of $209.75 sits at just 14.5% of the 52-week range, near the lows, suggesting the market is pricing in significant pessimism or a potential value opportunity if fundamentals stabilize. The stock has underperformed the S&P 500 by 46.81% over the past year, indicating severe relative weakness. Short-term momentum shows a mixed picture: the 1-month change is +8.90%, a sharp recovery from the 3-month change of -11.66%, which itself was a deceleration from the 6-month change of -22.31%. This divergence—a positive 1-month bounce within a longer-term downtrend—could signal a temporary relief rally or the early stages of a trend reversal, but the 1-year trend remains firmly bearish. The stock's beta of 1.318 indicates it is 31.8% more volatile than the market, amplifying both upside and downside moves. Key support is at the 52-week low of $185.50; a breakdown below this level would signal further downside and potentially test lower supports. Resistance is at the 52-week high of $329.09; a breakout above this level would represent a major trend reversal. The recent bounce from the June lows near $187.72 suggests buyers are defending the support zone, but the stock remains well below its 200-day moving average (not provided), confirming the bearish structure.
Beta
1.32
1.32x market volatility
Max Drawdown
-42.6%
Largest decline past year
52-Week Range
$186-$329
Price range past year
Annual Return
-25.5%
Cumulative gain past year
| Period | ADSK Return | S&P 500 |
|---|---|---|
| 1m | +15.1% | +1.4% |
| 3m | -3.8% | +3.9% |
| 6m | -15.8% | +6.3% |
| 1y | -25.5% | +16.0% |
| ytd | -21.2% | +8.4% |
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ADSK Fundamental Analysis
Revenue growth has been solid but decelerating: the most recent quarter (Q1 FY2027, ending April 30, 2026) reported revenue of $1.934 billion, up 18.43% year-over-year, accelerating from the prior quarter's $1.957 billion (which was up 19.4% from the year-ago quarter). However, the sequential decline from Q4 ($1.957B) to Q1 ($1.934B) is typical seasonality. The Architecture, Engineering & Construction segment is the largest at $970 million, followed by AutoCAD ($474M) and Manufacturing ($367M), with Media & Entertainment contributing $86 million. The growth trajectory remains positive, but the deceleration from the mid-20% growth rates seen in FY2025 (e.g., Q2 FY2025 revenue was $1.763B, up 17.1% YoY) suggests maturation. Profitability is strong and improving: net income in Q1 FY2027 was $491 million, with a net margin of 25.4%, up from 16.1% in Q4 FY2026 and 9.3% in Q1 FY2026. Gross margin remains consistently high at 90.95%, typical for software companies. Operating margin expanded to 27.97% from 27.13% in Q4, driven by operating leverage as revenue grows faster than operating expenses. The company is solidly profitable with a trailing PE of 47.9x, but the forward PE of 14.7x implies significant earnings growth expectations. The balance sheet is healthy: debt-to-equity is 0.90, and the current ratio is 0.85, indicating adequate liquidity. Free cash flow (FCF) is robust at $876 million in Q1 FY2027, up from $965 million in Q4 FY2026, and the FCF yield (based on market cap of $53.86B) is approximately 5.1%. ROE is strong at 36.9%, reflecting efficient capital use. The company generates ample cash to fund operations and share repurchases ($448 million in Q1), reducing reliance on external financing.
Quarterly Revenue
$1.9B
2026-04
Revenue YoY Growth
+18.4%
YoY Comparison
Gross Margin
91.0%
Latest Quarter
Free Cash Flow
$2.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ADSK Overvalued?
Since net income is positive ($491 million), the primary valuation metric is the P/E ratio. The trailing P/E is 47.89x, while the forward P/E is 14.72x, implying the market expects a sharp increase in earnings over the next year. This gap is unusually wide and suggests either aggressive earnings growth forecasts or that the trailing earnings include one-time items. The PEG ratio is 22.51x, indicating the stock is expensive relative to its growth rate. Compared to the software application industry, Autodesk's trailing P/E of 47.89x is at a significant premium to the industry average (not provided, but typically in the 20-30x range for mature software companies). The P/S ratio of 7.47x is also elevated, reflecting a premium for its market leadership and high margins. Historically, Autodesk's trailing P/E has ranged from 25x to 155x over the past five years. The current 47.89x is near the lower end of its historical range (the 25x was in early 2026), suggesting the stock is relatively cheap by its own history. However, the forward P/E of 14.72x is near historical lows, implying the market is pricing in a significant earnings rebound. This could represent a value opportunity if the company delivers on growth, but it also reflects the risk of execution missteps.
PE
47.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 25x~97x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
30.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Autodesk's debt-to-equity ratio of 0.90 is moderate, but the current ratio of 0.85 indicates potential liquidity pressure if revenue growth stalls. The company's net margin improved to 25.4% in Q1 FY2027, but this is partly due to cost controls; any reversal in operating leverage could compress margins. Revenue concentration in the AEC segment ($970M, 50% of total) exposes the company to cyclical downturns in construction and real estate. The trailing PE of 47.89x leaves little room for error—if earnings growth disappoints, the stock could de-rate sharply.
Market & Competitive Risks: Autodesk trades at a premium to the software industry average PE, making it vulnerable to valuation compression if growth decelerates. The stock's beta of 1.318 amplifies macro sensitivity, and the 1-year relative strength of -46.81% versus the S&P 500 shows severe underperformance. Competitive threats from Adobe and emerging AI-native design tools could erode market share. Recent news highlights that Autodesk's AI strategy is under scrutiny, and the stock's decline despite a beat suggests the market is pricing in execution risk.
Worst-Case Scenario: If Autodesk fails to deliver on its raised guidance and AI monetization, the stock could fall to its 52-week low of $185.50, representing a -11.5% decline from the current price. In a severe recession or prolonged tech downturn, the stock could revisit its historical max drawdown of -42.56%, implying a price near $120. This scenario would require a combination of missed earnings, analyst downgrades, and macro headwinds compressing the PE multiple further.
FAQ
The primary risks are: (1) Execution risk—Autodesk's AI strategy may not monetize as expected, leading to missed growth targets. (2) Valuation risk—the trailing PE of 47.89x leaves little room for error; any earnings miss could trigger a sharp de-rating. (3) Macro risk—with a beta of 1.318, the stock is highly sensitive to interest rate changes and economic downturns, which could compress multiples. (4) Competitive risk—Adobe and emerging AI-native design tools could erode Autodesk's market share. The most severe risk is a break below the 52-week low of $185.50, which could lead to a -11.5% decline from current levels.
Based on analyst targets and our scenario analysis, the 12-month forecast for ADSK is bullish. The base case (50% probability) sees the stock reaching $235-$316, with the average target of $316.08 representing 50.7% upside. The bull case (30% probability) targets $316-$456, driven by strong AI adoption and margin expansion. The bear case (20% probability) sees the stock falling to $185-$235 if execution falters. The most likely scenario is the base case, assuming Autodesk sustains 15-18% revenue growth and margin improvement. Key assumptions include stable macro conditions and successful AI monetization.
Autodesk's valuation is a tale of two metrics. The trailing PE of 47.89x is high relative to the software industry average of 20-30x, suggesting the stock is overvalued based on past earnings. However, the forward PE of 14.72x is near the low end of its 5-year range (25x-155x), implying the market expects a sharp earnings rebound. The PEG ratio of 22.51x indicates the stock is expensive relative to its growth rate. Compared to its own history, the current forward PE is cheap, but the market is pricing in aggressive earnings growth. If Autodesk delivers on its guidance, the stock is undervalued; if not, it could de-rate further.
From a risk/reward perspective, ADSK appears attractive for investors with a 12-month horizon. The average analyst target of $316.08 implies 50.7% upside from the current $209.75, and the forward PE of 14.7x is near historical lows. However, the stock is in a downtrend, down 30% over the past year, and the trailing PE of 47.89x is elevated. The biggest downside risk is a break below the 52-week low of $185.50, which would trigger further selling. For long-term investors who believe in Autodesk's AI strategy and subscription model, the current price offers a compelling entry point. For short-term traders, the technical trend is bearish, so waiting for a confirmed breakout above $235 is prudent.
ADSK is better suited for long-term investment (12-24 months) due to its strong fundamentals and growth potential. The stock's beta of 1.318 makes it volatile for short-term trading, and the current downtrend suggests near-term uncertainty. The company pays no dividend, so total return depends on price appreciation. With a forward PE of 14.7x and analyst upside of 50.7%, long-term investors could benefit from a re-rating as earnings grow. Short-term traders should wait for a technical breakout above $235 or a clear catalyst. A minimum holding period of 12 months is recommended to allow the earnings story to play out.