On Wednesday, Piper Sandler updated its outlook on Autodesk (NASDAQ:ADSK), increasing the price target to $311 from the previous $257. The firm has chosen to keep a Neutral rating on the stock. The adjustment follows Autodesk's solid third-quarter performance, which saw improvements across several financial metrics.
Autodesk reported an increase of $18 million in revenue, $10 million in billings, a 0.25 percentage point rise in operating margin, and a $10 million boost to free cash flow. These gains are noted alongside the company's ongoing transition to a new transactional model, which is expected to contribute approximately $270 million to billings, equating to a 5.0-5.5 percentage point growth to the overall figures.
The company is currently amidst a strategic shift, with around $270 million of its $600 million billings attributed to the new model. This transition is deemed to be proceeding smoothly by the analyst at Piper Sandler.
In addition to its financial updates, Autodesk has announced the appointment of Janesh Moorjani as the new Chief Financial Officer (CFO). Moorjani, previously CFO and Chief Operating Officer (COO) of Elastic (NYSE:ESTC), will assume his new role at Autodesk on December 16.
While Autodesk typically provides a forecast for the next fiscal year's revenue growth in its third-quarter updates, the company is postponing any predictions until Moorjani has fully transitioned into his role as CFO. This decision underscores the significance of his upcoming tenure and the potential impact on Autodesk's financial strategies moving forward.
In other recent news, Autodesk reported third-quarter fiscal year 2025 earnings with revenues meeting expectations and an 11% year-over-year increase. The software company's new direct billing model contributed approximately 1% to this quarter's growth. Autodesk also posted Non-GAAP earnings per share (EPS) of $2.17, surpassing both Rosenblatt's estimate and the consensus of $2.12.
Rosenblatt Securities upgraded its price target on Autodesk shares to $325 from the previous $295 and continued to recommend a Buy rating. Meanwhile, Mizuho (NYSE:MFG) Securities lifted its price target to $280 from $260, maintaining a Neutral rating, and Oppenheimer reaffirmed a $350 target with an Outperform rating.
The company 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 performance and strategic shifts are reflected in its current financial metrics and market position. According to InvestingPro data, Autodesk boasts a market capitalization of $68.37 billion, with a revenue of $5.805 billion for the last twelve months as of Q2 2025. The company's revenue growth stands at 11.38% over the same period, aligning with the solid performance noted in the article.
An InvestingPro Tip highlights Autodesk's impressive gross profit margins, which is corroborated by the data showing a gross profit margin of 91.92% for the last twelve months. This high margin suggests strong pricing power and efficient cost management, factors that could contribute to the company's ability to navigate its ongoing transition to a new transactional model.
Another relevant InvestingPro Tip indicates that Autodesk is trading near its 52-week high, with the current price at 97.35% of its 52-week peak. This aligns with Piper Sandler's increased price target and reflects investor confidence in the company's strategic direction and financial performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 17 additional tips for Autodesk, providing a deeper understanding of the company's financial health and market position.
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