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On Friday, Stifel maintained a positive outlook on Autodesk (NASDAQ:ADSK), raising the software company's price target to $320 from the previous $290, while keeping a Buy rating on the stock. The firm's analysis followed Autodesk's robust second-quarter financial results, which surpassed both guidance and market expectations due to the company's solid performance.
Autodesk's recent success can be attributed to the effective implementation of its new transactional model in North America, with plans to expand this model to Europe in September and to Japan in November.
The company's financial outlook for the fiscal year 2025 has improved, with increased projections for billings, revenue, earnings per share (EPS), and free cash flow (FCF). Additionally, Autodesk's revenue and FCF forecasts have seen organic growth, and the company has confirmed its FCF guidance for fiscal year 2026.
Despite challenges from activist investor Starboard, Autodesk has emphasized its ability to grow margins organically, excluding the effects of the transactional model changes. The company intends to continue this trend of margin expansion. Alongside these developments, Autodesk is intensifying its share buyback program, signaling confidence in its financial health and future prospects.
The firm highlighted that despite a complex macroeconomic environment, Autodesk is poised to see its top-line figures rise in the upcoming years due to the implementation of its new transactional model. This change is expected to naturally regenerate the company's free cash flow. Stifel anticipates that Autodesk will maintain its trajectory of organic operating margin growth, aiming to achieve GAAP margins that rank among the industry's best.
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