Autodesk stock falls 10% as PTC acquisition rumors surface

Investing.com - Autodesk (NASDAQ:ADSK) shares have fallen nearly 10% following Bloomberg’s report that the company is considering acquiring PTC (NASDAQ:PTC) in a cash-and-stock deal, according to UBS. The stock’s recent decline has pushed it into oversold territory according to InvestingPro data, with shares now trading at $292.62, representing an 11% drop over the past week.

UBS maintained its Buy rating on Autodesk with a $370.00 price target despite the market reaction. The potential acquisition follows recent industry consolidation, including Synopsys (NASDAQ:SNPS) acquiring Ansys (NASDAQ:ANSS) and Siemens (ETR:SIEGn) purchasing Altair. With impressive gross profit margins of 92% and strong cash flows sufficient to cover interest payments, Autodesk appears well-positioned for strategic moves.

Investor concerns primarily center on regulatory approval given product overlap between the companies, with secondary concerns about PTC’s valuation and financing arrangements for the potential deal, UBS noted.

The acquisition would strengthen Autodesk’s Manufacturing business, which represents approximately 20% of company revenue, by expanding its upmarket presence and creating additional cross-selling opportunities.

Autodesk currently trades at 27 times calendar year 2025 estimated EV/FCF and 24 times calendar year 2026 estimated EV/FCF, with UBS seeing potential upside to estimates despite concerns that large acquisitions could complicate near-term execution.

In other recent news, Autodesk has been the focus of several significant developments. The company is reportedly considering an acquisition of PTC, as noted by Citi, which reiterated its Buy rating on Autodesk amidst these rumors. Citi expressed concerns that such a move could impact Autodesk’s margin expansion and free cash flow. Meanwhile, Autodesk continues to focus on its strategic priorities, emphasizing cloud, platform, and artificial intelligence to boost shareholder value, as outlined in a recent business update. The company plans to optimize its sales and marketing operations and allocate capital toward organic investments and acquisitions. Stifel also reiterated a Buy rating on Autodesk, highlighting the importance of channel consolidation and the company’s transition to higher-value services. Additionally, Autodesk intends to continue its share repurchase program as free cash flow increases. These developments reflect Autodesk’s ongoing efforts to enhance its market position and financial performance.

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