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Autodesk, Inc. (ADSK), with a market cap of $52.5 billion, is a leading provider of 3D design, engineering, and entertainment software solutions. Based in San Francisco, California, the company serves diverse industries, including architecture, engineering, construction, manufacturing, and digital media.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Autodesk fits this criterion perfectly. Autodesk is globally recognized for its pioneering software suite in CAD, digital prototyping, and media and entertainment, driving innovation across multiple industries.
However, the software company has dipped 11.5% from its 52-week high of $279.53, reached on March 1. Over the past three months, shares of ADSK have declined 5%, which lags behind the broader S&P 500 Technology Sector SPDR's (XLK) gain of 10.1% during the same period.
In the longer term, ADSK has risen 1.6% on a YTD basis, trailing behind the XLK’s 19.1% gains. Moreover, shares of Autodesk have gained 19.9% over the past 52 weeks, compared to XLK’s 34.2% gains over the same time frame.
Nevertheless, ADSK stock has been trading above both its 50-day and 200-day moving averages since mid-June, indicating a bullish price trend.
ADSK's underperformance stems from its significant business model transformation, transitioning from multi-year contracts to annual subscriptions, which has impacted its financial metrics and market perception. However, the stock rose 5.5% following its Q1 earnings result on June 11 due to the company's better-than-expected revenue and earnings performance, alongside reaffirmed full-year guidance.
Plus, the stock surged 6.5% on June 17 after the activist investor Starboard Value disclosed a $500 million stake and advocated for significant operational and governance changes to enhance growth, profitability, and shareholder value.
Also, ADSK has outpaced its rival Adobe Inc. (ADBE), which saw a 14.8% increase over the past 52 weeks but a decline of 7.2% on a YTD basis.
Despite the stock’s underperformance relative to the broader sector, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 20 analysts covering the stock, and it is currently trading below the mean price target of $265.58.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
