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Autodesk, Inc.
Technology | Software - Application
⚡ Executive Summary
📊 THE BOTTOM LINE
Autodesk is a leading provider of 3D design, engineering, and entertainment technology solutions worldwide. Its strong subscription-based business model, extensive product portfolio, and global market presence underpin its high-quality business. The company maintains its market leadership through continuous innovation and deep integration into customer workflows.
⚖️ RISK VS REWARD
At a current price of US$306.74, Autodesk trades at a trailing P/E of 59.56 and a forward P/E of 33.41, indicating high market expectations. The average analyst target price of US$365.14 suggests potential upside of approximately 19%. The risk/reward profile is balanced, with potential for continued growth offset by a premium valuation.
🚀 WHY ADSK COULD SOAR
- • Strategic alliances, such as with Eaton for AI-powered digital twins, can expand Autodesk's offerings into new sectors and drive increased adoption.
- • The strong subscription model ensures predictable and high-margin recurring revenue, accelerating with continued customer adoption and upselling opportunities.
- • Continued global expansion, especially in emerging markets, presents significant opportunities to grow its diverse international revenue base (64% outside U.S.).
⚠️ WHAT COULD GO WRONG
- • Intense competition in the CAD/BIM software market from rivals like Dassault Systèmes and Bentley Systems could erode market share and pressure pricing.
- • A prolonged economic slowdown in key industries like construction and manufacturing could reduce demand for design software and impact subscription renewals.
- • Increased regulatory scrutiny over data privacy or market dominance in various regions could lead to operational hurdles or financial penalties.
🏢 Company Overview
💰 How ADSK Makes Money
- • Autodesk provides 3D design, engineering, and entertainment technology solutions worldwide, including flagship products like AutoCAD, Revit, Fusion, and Maya.
- • Revenue is primarily generated through a subscription-based model (ratable license agreements), sold directly via its online store and through a global network of resellers and distributors.
- • The company serves a diverse range of industries, including architecture, engineering, construction, product design, manufacturing, and media and entertainment.
Revenue Breakdown
Architecture, Engineering & Construction (AEC)
42.67%
Software for building design, construction, and infrastructure projects.
AutoCAD and AutoCAD LT Family
22.79%
Core 2D computer-aided design drafting and detailing software.
Manufacturing
17.27%
Tools for product design, engineering, and manufacturing processes.
Media & Entertainment and Other
17.27%
Software for 3D modeling, animation, visual effects, and other products.
🎯 WHY THIS MATTERS
Autodesk's strong recurring revenue model, primarily driven by subscriptions, ensures predictable cash flow and high customer retention. This sticky business model provides a stable foundation for investment in innovation and market expansion.
⭐ Competitive Advantage: What Makes ADSK Special
1. Extensive Product Ecosystem & Industry Standard
Autodesk's comprehensive suite of products, including AutoCAD and Revit, are recognized as industry benchmarks. This creates significant switching costs for users deeply integrated into the ecosystem, making transitions to competitors disruptive and costly. The breadth of tools addresses diverse design needs, fostering high customer loyalty.
2. Global Reach & Diverse Customer Base
Operating in over 180 countries with approximately 64% of its revenue generated from outside the United States, Autodesk boasts a geographically and industrially diversified customer base. This broad market presence across construction, manufacturing, and media industries provides resilience against regional economic fluctuations and specific industry downturns.
3. Continuous Innovation & AI Integration
Autodesk consistently invests in research and development, incorporating advanced technologies like AI and digital twin capabilities into its offerings. Partnerships, such as with Eaton for AI-Powered Digital Energy Twin, ensure the company remains at the forefront of design and engineering software, attracting new users and retaining its existing customer base through cutting-edge solutions.
🎯 WHY THIS MATTERS
These distinct advantages collectively create a formidable economic moat around Autodesk's business. The deep integration of its industry-standard products into customer workflows, coupled with its vast global footprint and relentless pursuit of innovation, underpins its sustained profitability and market leadership in the dynamic software sector.
👔 Who's Running The Show
Andrew Anagnost
President and CEO, Board Director
Andrew Anagnost, CEO since 2017, boasts over 25 years of experience in product and business development. He spearheads Autodesk's strategic direction in 3D design, engineering, and entertainment technology, focusing on cloud transformation and subscription growth. His leadership emphasizes product innovation and expanding market reach.
⚔️ What's The Competition
The CAD (Computer-Aided Design) and BIM (Building Information Modeling) software market is characterized by intense competition from both specialized and diversified software vendors. Key competitive factors include feature sets, ecosystem integration, pricing models, and cloud-native capabilities. Autodesk maintains a leading position through its comprehensive product suite and widespread adoption as an industry standard.
📊 Market Context
- Total Addressable Market - The global CAD and PLM software market was US$17.76B in 2025, projected to reach US$30.36B by 2032. The BIM software market was US$7.904B in 2025, expected to reach US$60.21B by 2034.
- Key Trend - The most significant trend is the accelerating adoption of cloud-based solutions and artificial intelligence (AI) integration for enhanced design automation and collaborative workflows.
Competitor
Description
vs ADSK
Dassault Systèmes (SolidWorks)
A French software company providing 3D design, 3D digital mock-up, and product lifecycle management (PLM) software. Strong presence in manufacturing and product design.
Directly competes with Autodesk in 3D CAD, particularly with its SolidWorks platform, offering a strong alternative for mechanical design and PLM solutions.
Bentley Systems, Inc. (MicroStation)
An American software company developing software for designing, building, and operating infrastructure. Specializes in civil engineering, transportation, and utilities.
A key competitor in the civil engineering and BIM space, with its MicroStation platform providing comprehensive solutions for large-scale infrastructure projects.
Graphisoft (Archicad)
A Hungarian software company known for its Archicad software, a leading BIM software solution specifically designed for architects.
A major BIM software competitor, particularly prominent in the architectural segment, offering an alternative to Autodesk's Revit with a focus on ease of use and architectural-specific features.
Market Share - Global CAD/BIM Software Market
Autodesk
35%
Dassault Systèmes
20%
Bentley Systems
10%
Others
35%
📊 Valuation & Analysis
📈 Wall Street Summary
Analyst Rating Distribution - 6 Hold, 20 Buy, 5 Strong Buy
6
20
5
12-Month Price Target Range
Low Target
US$275
-10%
Average Target
US$365
+19%
High Target
US$430
+40%
Current: US$306.74
🚀 The Bull Case - Upside to US$430
1. Expanding Cloud and AI Offerings
High Probability
Autodesk's continued push into cloud-based solutions and AI-powered design tools, including digital twin initiatives, can capture new market segments and enhance product stickiness, driving increased subscription adoption. This could boost annual revenue growth by 2-3% above current projections over the next three years.
2. Strong Recurring Revenue Model
High Probability
The company's fully transitioned subscription model ensures highly predictable revenue streams and robust free cash flow generation. Sustained high renewal rates and strategic price increases could lead to a steady 10-12% annual increase in recurring revenue, bolstering profitability and shareholder returns.
3. Infrastructure Spending Tailwinds
Medium Probability
Global trends toward increased infrastructure development and smart city initiatives will drive sustained demand for Autodesk's AEC (Architecture, Engineering, and Construction) software. This provides a long-term growth catalyst, potentially adding US$500M-US$1B in incremental revenue over the next five years through significant contract wins.
🐻 The Bear Case - Downside to US$275
1. Intensified Competition and Pricing Pressure
Medium Probability
The CAD/BIM market is highly competitive. Aggressive pricing strategies by rivals or the emergence of disruptive open-source alternatives could erode Autodesk's market share and pressure its high margins. This could lead to a 5-10% decrease in average subscription prices, impacting revenue growth by US$300M-US$600M annually.
2. Macroeconomic Headwinds in Key Industries
Medium Probability
A prolonged global economic downturn, particularly affecting the construction, manufacturing, or media industries, could directly impact demand for Autodesk's software. This scenario could lead to slower subscription growth, increased churn, and reduced new customer acquisition, potentially decelerating revenue growth to low single-digits.
3. Slowdown in International Growth
Low Probability
While international markets are a growth driver, unforeseen geopolitical events, economic instability in key regions, or unfavorable currency fluctuations could hinder Autodesk's ability to expand. This could reduce reported international revenue (64% of total) by US$200M-US$300M, significantly impacting overall top-line growth.
🔮 Final thought: Is this a long term relationship?
Autodesk's entrenched position as an industry standard and its deep customer integration via a robust subscription model suggest long-term durability. While competitive pressures and macroeconomic cycles are persistent risks, management's sustained focus on innovation, particularly in cloud and AI, aims to future-proof the business. Investors happy holding for a decade would likely believe in the continuous demand for advanced design software and Autodesk's proven ability to adapt and evolve with technological shifts, compounding value from its strong market position.
📋 Appendix
Financial Performance
Metric
FY 2022
FY 2023
FY 2024
FY 2025 (Est)
FY 2026 (Est)
Income Statement
Revenue
US$4.39B
US$5.00B
US$5.50B
US$6.89B
US$8.13B
Gross Profit
US$3.97B
US$4.53B
US$4.99B
US$6.25B
US$7.37B
Operating Income
US$0.62B
US$0.99B
US$1.13B
US$1.64B
US$1.93B
Net Income
US$0.50B
US$0.82B
US$0.91B
US$1.11B
US$1.40B
EPS (Diluted)
2.24
3.78
4.19
5.15
6.49
Balance Sheet
Cash & Equivalents
US$1.53B
US$1.95B
US$1.89B
US$1.99B
US$2.20B
Total Assets
US$8.61B
US$9.44B
US$9.91B
US$11.20B
US$12.50B
Total Debt
US$3.06B
US$2.67B
US$2.63B
US$2.73B
US$2.73B
Shareholders' Equity
US$0.85B
US$1.15B
US$1.85B
US$2.89B
US$3.50B
Key Ratios
Gross Margin
90.5%
90.4%
90.7%
90.7%
90.7%
Operating Margin
14.1%
19.8%
20.5%
23.8%
23.8%
Return on Equity (TTM)
58.54
71.88
48.84
40.33
40.33
Valuation Ratios
| Metric | Value | Description |
|---|---|---|
| P/E Ratio (TTM) | 59.56 | The trailing twelve-month Price-to-Earnings ratio measures how much investors are willing to pay for each dollar of past earnings, reflecting current market sentiment towards the company's profitability. |
| Forward P/E | 33.41 | The forward Price-to-Earnings ratio estimates future earnings, providing insight into investor expectations for the company's earnings growth over the next 12 months. |
| PEG Ratio | N/A | The Price/Earnings to Growth (PEG) ratio evaluates a stock's valuation by factoring in its expected earnings growth, offering a more complete picture than P/E alone. |
| Price/Sales (TTM) | 9.49 | The trailing twelve-month Price-to-Sales ratio compares the company's market capitalization to its revenue, indicating how much investors are paying for each dollar of sales. |
| Price/Book (MRQ) | 22.74 | The most recent quarter's Price-to-Book ratio measures how much investors are willing to pay for each dollar of a company's book value, indicating its valuation relative to its net assets. |
| EV/EBITDA | 36.76 | Enterprise Value to EBITDA is a valuation multiple that compares the total value of a company to its earnings before interest, taxes, depreciation, and amortization, offering a comprehensive view of its overall value. |
| Return on Equity (TTM) | 40.33 | The trailing twelve-month Return on Equity measures the profitability of a company in relation to the equity of its shareholders, indicating how efficiently management is using shareholders' investments. |
| Operating Margin | 25.69 | Operating Margin indicates how much profit a company makes on each dollar of sales after paying for variable costs of production, but before interest and tax, reflecting operational efficiency. |
Peer Comparison
| Company | Market Cap (B) | P/E Ratio | P/B Ratio | Revenue Growth (%) | Operating Margin (%) |
|---|---|---|---|---|---|
| Autodesk, Inc. (Target) | 65.34 | 59.56 | 22.74 | 18.0% | 25.7% |
| Dassault Systèmes SE | 36.28 | 27.33 | 3.77 | N/A | 21.5% |
| PTC Inc. | N/A | 28.74 | N/A | N/A | 36.8% |
| Bentley Systems, Inc. | 13.58 | N/A | N/A | N/A | 24.3% |
| Sector Average | — | 28.04 | 3.77 | N/A | 27.5% |