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NEW YORK - Investment firm Starboard Value LP, holding over $500 million in Autodesk, Inc. (NASDAQ: ADSK) shares, has announced its intention to nominate a slate of directors at the software company’s 2025 annual meeting. The software giant, currently valued at $55.37 billion, has maintained impressive gross profit margins of 92% over the last twelve months, according to InvestingPro data. The activist investor cited Autodesk’s prolonged financial and operational underperformance and ineffective board oversight as reasons for the proposed changes. While the company has achieved 11.5% revenue growth in the past year and maintains a GOOD financial health score based on InvestingPro metrics, its current P/E ratio of 50.3x suggests relatively high valuation levels compared to peers.
In a letter to Autodesk shareholders, Starboard outlined its strategy to achieve a 45% underlying adjusted operating margin by the fiscal year 2028. The firm believes that a reconstituted board is necessary to instill accountability, rebuild credibility, restore investor confidence, and improve Autodesk’s performance.
Starboard, which will file a preliminary proxy statement and accompanying white universal proxy card with the SEC, remains open to engaging constructively with Autodesk’s management and the board. The proxy materials, once available, will be provided at no charge on the SEC’s website and upon request from Starboard’s proxy solicitor.
The participants in the proxy solicitation include various Starboard entities and individuals, collectively owning approximately 2 million shares of Autodesk as of March 18, 2025. The firm’s approach is to invest in undervalued companies and actively engage with management teams and boards to unlock shareholder value.
This move by Starboard comes as part of its broader investment strategy, which often involves pushing for operational improvements and strategic changes in companies where it holds significant stakes. The outcome of this proxy fight could lead to a shift in Autodesk’s governance and potentially its business strategy going forward. Analysts maintain a positive outlook on the stock, with a consensus recommendation of 1.78 (where 1 is Strong Buy and 5 is Strong Sell). For deeper insights into Autodesk’s valuation and growth potential, including exclusive ProTips and comprehensive analysis, visit InvestingPro, where you’ll find detailed research reports and expert financial metrics.
Information regarding Starboard’s intentions is based on a press release statement from the investment adviser.
In other recent news, Autodesk reported an 11.6% year-over-year revenue growth in its fourth-quarter fiscal year 2025 results, which matched consensus expectations. The Architecture, Engineering, and Construction segment showed notable strength with a 15.2% increase. Autodesk also announced a restructuring program aimed at enhancing profitability, projecting an 8-9% constant currency organic revenue growth for fiscal year 2026. Despite the revised growth projections, several analyst firms have maintained positive ratings on Autodesk. UBS increased its price target to $370 while maintaining a Buy rating, citing a focus on margin improvement as a key factor. Stifel, on the other hand, reduced its price target to $350 but also maintained a Buy rating, acknowledging the company’s strong performance and strategic initiatives. RBC Capital and BMO Capital maintained their respective Outperform and Market Perform ratings, with price targets of $345 and $324, respectively, highlighting Autodesk’s restructuring efforts and strategic business adjustments. These developments reflect a mixed but generally optimistic outlook from analysts regarding Autodesk’s future performance.
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