On Wednesday, Rosenblatt Securities increased its price target on Autodesk (NASDAQ:ADSK) shares to $325 from the previous $295, while continuing to recommend a Buy rating for the software company. Autodesk, which trades on the NASDAQ under the ticker ADSK, reported its third-quarter fiscal year 2025 earnings, showing revenues in line with expectations and an 11% year-over-year increase. The company's adoption of a new direct billing model contributed approximately 1% to this quarter's growth.
Autodesk's third-quarter operating margins stood at 36%, and the company posted Non-GAAP earnings per share (EPS) of $2.17, surpassing both Rosenblatt's estimate and the consensus of $2.12. Despite a consistent macroeconomic environment and recovering cash flows, Autodesk's stock experienced a decline in after-hours trading. This reaction could be tied to the recent appointment of Janesh Moorjani as the new CFO, following his tenure at Elastic (NYSE:ESTC), which has had a variable performance this year.
The software giant also made slight adjustments to its fiscal year 2025 revenue and operating margin forecasts, reflecting the company's confidence in its financial trajectory. This optimistic outlook is supported by the progress in implementing Autodesk's new direct billing program, which is expected to contribute positively to future growth.
In the wake of the quarterly report, Rosenblatt has modestly revised its estimates and has also introduced projections for fiscal year 2027. The firm's decision to roll forward its valuation underpins the new $325 price target, suggesting a continued positive stance on Autodesk's financial health and market position.
The report concludes with a note on the market's reaction to Autodesk's performance and the strategic executive changes, indicating that the company's recent stock price surge prior to the earnings release and the new CFO's background may have influenced investor sentiment.
In other recent news, Autodesk has reported robust third-quarter results for fiscal year 2025, with a 12% revenue increase in constant currency terms. The company's total revenue saw an 11% rise, with AutoCAD and AutoCAD LT revenue growing by 8%, and AEC and manufacturing segments witnessing increases of 12% and 16%, respectively. Direct revenue experienced a notable 23% jump, now making up 42% of the total revenue. Additionally, billings surged by 28%, partly due to the implementation of a new transaction model in Western Europe.
Mizuho (NYSE:MFG) Securities and Oppenheimer have updated their outlook on Autodesk, maintaining Neutral and Outperform ratings respectively. Mizuho lifted its price target to $280 from $260, while Oppenheimer reaffirmed a $350 target. Autodesk also announced the appointment of Janesh Moorjani, formerly of Elastic N.V., as its new Chief Financial Officer.
Autodesk aims to maintain a 10-15% growth framework over the long term and is preparing for strong free cash flow growth in fiscal 2026.
InvestingPro Insights
Autodesk's recent financial performance and market position are further illuminated by data from InvestingPro. The company's impressive gross profit margin of 91.92% for the last twelve months as of Q2 2025 underscores its operational efficiency, aligning with Rosenblatt's positive outlook. This is complemented by a robust revenue growth of 11.38% over the same period, consistent with the 11% year-over-year increase reported in the article.
InvestingPro Tips highlight Autodesk's strong market performance, with the stock trading near its 52-week high and showing a significant 57.2% return over the past year. This aligns with the article's mention of the recent stock price surge. Additionally, the company's high earnings multiple and P/E ratio of 64.26 suggest investor confidence in future growth prospects, despite the slight decline in after-hours trading noted in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 17 additional tips on Autodesk, providing deeper insights into the company's financial health and market position.
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