Can ADSK’s AI-Powered Product Enhancements Push the Stock Higher?

Autodesk ADSK recently announced AI-integrated product developments across segments to enhance performance and efficiency. It aims to simplify complexities related to the manufacturing and designing of products by introducing AI capabilities to Fusion and Alias.

Autodesk Adds AI-Powered Capabilities to Fusion

Autodesk Fusion will be integrated with new Autodesk AI-supported automation to enable time-saving. A combination of performance enhancements and the latest granular Manufacturing Dada Model API is expected to make Fusion faster. Integration with tools across the design will also become easier.

MDM API helps authorized third-party apps to feed their data into Fusion models. This helps in integrating Fusion better into existing workflows and connections with cloud and desktop tools like OpenBOM and Cideon become easier.

Alias Gets Form Explorer, ADSK Adds AI to Tools

Autodesk Alias will be powered by Form Explorer, an automative design generation tool. The enhancements will be easy to integrate across the segments and will aid in designing and manufacturing complex products.

ADSK has acquired NAVASTO, a company focused on the use of AI to accelerate design and engineering. NAVASTO brings wind tunnel simulation into Alias’ early creative design process. It enables designers to predict and optimize the drag coefficient over an automotive exterior and its aerodynamics. This reduces the likelihood of redesigns during engineering.

ADSK is integrating AI in creative tools — Arnold, Flame, Maya, and Wonder Studio — to fasten creative workflow.

ADSK’s Wonder Studio will be made capable of anticipating character movement in spite of object obstruction and making natural poses with less noise and shaking.

Neutral Motion Control, Autodesk’s latest prototype, will allow animators to direct action using limited keyframes and neural networks.

Autodesk also announced that it will now connect Autodesk Forma with Autodesk Docs to increase collaboration between platforms.

Autodesk Rides on Strong Portfolio

Autodesk shares have returned 9.5% in a month, outperforming the broader Zacks Computer and Technology sector’s appreciation of 4.7%.

ADSK has outperformed the Zacks Computer – Software industry and its peers like Intuit INTU, ANSYS ANSS and Verint Systems VRNT.

Over the same time frame, shares of ANSYS have returned 3.3%, while Intuit and Verint have declined 3.7% and 11.6%, respectively. The industry has returned break-even YTD.

Autodesk’s performance is gaining from new business growth, steady subscription renewal rates, and strong competitive performance. Higher demand for its cloud-based products, mobile solutions, and design suites is expected to drive the company’s revenues over the long haul.

The rapid adoption of BIM 360 products and the success of the maintenance of the subscription program bode well for the growth of the company.

ADSK Guidance Positive

For fiscal 2025, ADSK expects revenues between $6.08 billion and $6.13 billion. In fiscal 2024, Autodesk generated total revenues of $5.5 billion.

For fiscal 2025, ADSK expects its non-GAAP earnings between $8.18 per share and $8.31 per share.

For the third quarter of fiscal 2025, Autodesk expects revenues between $1.555 billion and $1.57 billion. Non-GAAP earnings are anticipated between $2.08 per share and $2.14 per share.

Earnings Estimates Are Bright for Autodesk

The Zacks Consensus Estimate for ADSK’s third-quarter fiscal 2025 earnings is pegged at $2.11 per share, up by a penny over the past 30 days, and indicates 1.93% year-over-year growth.

The consensus mark for fiscal 2025 earnings is pegged at $8.24 per share, unchanged in the past 30 days, and indicates 8.42% year-over-year growth.

Autodesk’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 5.94%.

Autodesk Shares – Is it the Right Time to Jump in?

ADSK shares are overvalued, as suggested by a Value Score of D.

In terms of the forward 12-month Price/Earnings (P/E) ratio, ADSK is trading at 45.76X, higher than the Zacks Computer & Technology sector’s 27.09X.

However, ADSK’s growth prospects, driven by product portfolio enhancement capable of capitalizing on the rapid adoption of designing and manufacturing, justifies the premium valuation.

Autodesk currently has a Zacks Rank #2 (Buy), which implies that it is the right time for investors to accumulate ADSK stock.

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