Investment firm Piper Sandler has boosted its price target for Autodesk (ADSK, Financial) from $357 to $361, maintaining an Overweight rating on the company's shares. This adjustment comes after Autodesk's impressive Q1 2026 results, showcasing an 11% rise in constant-currency revenue and a significant 22% increase in billings growth, improving from last quarter's 15% growth. The robust performance was largely driven by strong activity in the AECO sector and enhanced conversion rates in the Autodesk store.
Additionally, Autodesk exhibited solid profitability with free cash flow reaching $556 million and EBIT margins at 37%, surpassing market expectations of $449 million and 35.6%, respectively. Despite the company's decision to slightly adjust its billing growth forecasts for the remainder of the year, Piper Sandler views the early momentum in Q1 as a strong indicator of future performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 28 analysts, the average target price for Autodesk Inc (ADSK, Financial) is $334.98 with a high estimate of $376.00 and a low estimate of $270.97. The average target implies an upside of 13.42% from the current price of $295.35. More detailed estimate data can be found on the Autodesk Inc (ADSK) Forecast page.
Based on the consensus recommendation from 32 brokerage firms, Autodesk Inc's (ADSK, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Autodesk Inc (ADSK, Financial) in one year is $311.03, suggesting a upside of 5.31% from the current price of $295.35. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Autodesk Inc (ADSK) Summary page.
ADSK Key Business Developments
Release Date: May 22, 2025
- Total Revenue Growth: 15% as reported, 16% in constant currency.
- New Transaction Model Revenue Contribution: $78 million in Q1.
- Billings Growth: 29% as reported, 30% in constant currency.
- New Transaction Model Billings Contribution: $105 million in Q1.
- Remaining Performance Obligations (RPO): $7.2 billion, up 21%.
- Current Annualized Recurring Revenue (ARPU): $4.6 billion, up 16%.
- GAAP Operating Margin: 14%, decreased by 7 percentage points due to restructuring charges.
- Non-GAAP Operating Margin: 37%, increased by 3 percentage points.
- Free Cash Flow: $556 million in Q1.
- Share Repurchases: Approximately 1.3 million shares for $353 million at an average price of $269 per share.
- Revenue Guidance Range for Fiscal '26: $6.925 billion to $6.995 billion.
- Billings Guidance Range for Fiscal '26: $7.16 billion to $7.31 billion.
- Free Cash Flow Guidance Range for Fiscal '26: $2.1 billion to $2.2 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Autodesk Inc (ADSK, Financial) delivered strong first-quarter results, with revenue and non-GAAP earnings per share exceeding the higher end of guidance ranges.
- The company saw a 15% increase in total revenue as reported and 16% in constant currency, driven by the new transaction model and strong performance in AECO and the Autodesk store.
- Billings increased by 29% as reported and 30% in constant currency, reflecting the shift to annual billings for most multi-year contracts.
- Non-GAAP operating margins increased by 3 percentage points due to operating leverage from ongoing cost discipline and timing benefits from restructuring.
- Autodesk Inc (ADSK) is focusing on strategic growth investments in cloud, platform, and AI, which are expected to drive long-term shareholder value.
Negative Points
- GAAP operating margins decreased by 7 percentage points, primarily due to restructuring charges and a one-time non-cash charge related to stock-based compensation.
- The company is facing uncertainty due to geopolitical and macroeconomic factors, which could impact customer bidding processes and material costs.
- There is a potential risk of disruption from ongoing sales and marketing optimization and the transition to a new Chief Revenue Officer.
- The Asia Pacific region showed some softness, particularly in Japan, China, and Korea, due to macroeconomic turmoil and trade discussions.
- The transition to the new transaction model is still ongoing, with channel partners adapting and onboarding their long tail of customers.
