Autodesk is near the top of its class for earnings grades, and big money investors are taking notice. On Tuesday the Relative Strength Rating for the software maker climbed to 73, improving from 65 the day before. The RS Rating for Autodesk stock is coming up to join its other key ratings, which are outstanding.
Additionally, Autodesk boasts a 96 Earnings Per Share Rating out of 99. Its 90 Composite Rating is also impressive. IBD's Composite Rating combines five separate proprietary ratings of fundamental and technical performance into one easy-to-use rating. Autodesk stock's Composite is notable because the best growth stocks have a Composite Rating of 90 or better.
Autodesk Stock Performs Well; Cites Growth Prospects
San Rafael, Calif.-based Autodesk makes cloud-based computer-aided-design, or CAD, software for architectural, engineering and manufacturing companies among others. On Feb. 23 the company announced fourth quarter earnings. It said at the time it expects to report current fiscal year 2024 adjusted earnings of $6.98 to $7.32 per share on $5.36 billion to $5.46 billion revenue.
"We started seeing the shift towards connected digital workflows in the cloud," CEO Andrew Anagnost said in the earnings news release, "in product design and manufacturing, then in architecture, followed by building engineering, and more recently construction. And we are now seeing growing momentum with owners."
Autodesk stock's Accumulation/Distribution Rating, a gauge of buying by institutions like mutual funds and insurance company investment funds, is a strong B on the A+ to E scale. The B A/D Rating shows that fund managers are fairly heavy buyers of Autodesk stock.
Moving In The Right Direction
The raised 73 RS Rating shows Autodesk stock is moving in the right direction. It still lags its other ratings, and needs work before it joins the best stocks to buy and watch. Market research shows that the best stocks often have an RS Rating north of 80 in the early stages of their moves. See if Autodesk can continue to show renewed price strength and hit that benchmark.
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Autodesk showed 24% earnings growth to $1.86 per share in its most recent report. Although still strong, that's down a bit from the prior three stanzas when it recorded EPS growth of 39%, 36% and 27%. Not a bad showing in what was a lousy year for the market overall. Revenue increased 9% last quarter to $1.32 billion.
Autodesk stock holds the No. 5 rank among its peers in the Computer Software-Design industry group. Cadence Design Systems and Ansys are also among the group's highest-rated stocks.
IBD's unique Relative Strength Rating measures share price movement with a 1 (worst) to 99 (best) score. The grade shows how a stock's price behavior over the last 52 weeks compares to all the other stocks in our database.
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