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Autodesk, Inc.
Technology | Software - Application
⚡ Executive Summary
📊 The Bottom Line
Autodesk, a leader in 3D design and engineering software, maintains strong recurring revenue from its subscription model, underpinning robust gross and operating margins. While facing competitive pressures and the need for continuous innovation in AI and cloud, its diversified portfolio across AEC, manufacturing, and media industries provides a solid foundation.
⚖️ Risk vs Reward
At a current price of US$252.87, Autodesk trades significantly below the average analyst target of US$363.20, implying substantial upside. The low target of US$275 suggests limited near-term downside. This presents a favorable risk/reward profile for investors seeking exposure to a market leader with growth catalysts.
🚀 Why ADSK Could Soar
- • Accelerated Digital Transformation: Increasing global adoption of BIM and AI-driven design solutions in construction and manufacturing drives demand for Autodesk's core platforms.
- • Strong Subscription Growth: The company's successful transition to a recurring subscription model ensures predictable revenue streams and high customer retention, enhancing financial stability.
- • International Market Expansion: Significant growth opportunities exist in emerging markets, particularly in Asia Pacific, where urbanization and infrastructure development are accelerating.
⚠️ What Could Go Wrong
- • Intensifying Competition: Aggressive competition from established players and new entrants offering specialized or lower-cost CAD/BIM solutions could pressure market share and pricing.
- • Economic Downturns: A slowdown in global construction, manufacturing, or media industries could directly impact software demand and subscription renewals.
- • Regulatory Scrutiny: Potential antitrust concerns or unfavorable changes in software licensing regulations in key markets could disrupt business operations and profitability.
🏢 Company Overview
💰 How ADSK Makes Money
- • Provides 3D design, engineering, and entertainment technology solutions globally, including AutoCAD, Revit, Fusion, and Maya.
- • Operates predominantly on a subscription-based software-as-a-service (SaaS) model, ensuring recurring revenue.
- • Serves key industries such as Architecture, Engineering, and Construction (AEC), Product Design and Manufacturing, and Media and Entertainment.
- • Distributes products through a network of resellers, distributors, and direct online sales.
- • Generates a significant portion of its revenue, approximately 64%, from outside the U.S.
Revenue Breakdown
Design Software
92.9%
Software for architectural plans, civil engineering, and mechanical design, including platform technologies.
Visualization & Animation Software
5.2%
Tools primarily for the media and entertainment sector, including 3D modeling and effects.
Other Services
1.9%
Includes consulting, assistance, and training services.
🎯 WHY THIS MATTERS
Autodesk's strong recurring revenue model from subscriptions provides significant financial stability and predictability. This sticky customer base, coupled with a diverse product portfolio across critical industries, reduces cyclicality and enhances long-term growth prospects.
⭐ Competitive Advantage: What Makes ADSK Special
1. Industry Standard Dominance
Autodesk's flagship products like AutoCAD and Revit are widely considered industry standards in architecture, engineering, and construction. This pervasive adoption creates network effects, where professionals are trained on and demand Autodesk software, making it difficult for competitors to gain significant traction. This entrenches Autodesk's position across design workflows globally.
2. Comprehensive Ecosystem & Cloud Integration
Autodesk offers a broad suite of interoperable software that covers the entire design, make, and operate lifecycle across multiple industries. The ongoing shift to cloud-based solutions (e.g., Autodesk Construction Cloud) enhances collaboration, data management, and workflow efficiency, further locking customers into its ecosystem and driving recurring revenue.
3. Global Reach & Brand Recognition
With operations and revenue generation globally (64% outside the U.S.), Autodesk leverages strong brand recognition and established reseller networks to serve a vast and diverse customer base. This global footprint provides scale advantages and allows the company to adapt to regional market demands and growth opportunities effectively.
🎯 WHY THIS MATTERS
These advantages collectively create a strong moat around Autodesk's business, driving high customer switching costs and predictable revenue streams. The company's deep integration into critical design workflows and its global presence position it for sustained leadership and continued innovation.
👔 Who's Running The Show
Andrew Anagnost
President, CEO & Director
Andrew Anagnost, 60, has served as Autodesk's CEO since 2017. He led the company's transformation to a subscription model and prioritized investments in cloud, platform, and AI. His background includes engineering roles at Lockheed and NASA, providing deep technical and product leadership. Under his tenure, Autodesk achieved significant revenue and free cash flow growth.
⚔️ What's The Competition
The CAD and BIM software markets are competitive, featuring both large diversified software companies and specialized niche players. Competition is based on software capabilities, ecosystem integration, pricing, and customer support. Autodesk maintains a leadership position but faces ongoing innovation and pricing pressures.
📊 Market Context
- Total Addressable Market - The global CAD software market was US$10.08B in 2024, projected to grow at a CAGR of 5.7% to US$17.52B by 2034. The BIM software market was US$9.12B in 2025, expected to reach US$27.12B by 2034 with a 12.9% CAGR. Growth is driven by industrial design, manufacturing, and increasing construction projects.
- Key Trend - Integration of AI and cloud-based SaaS solutions is reshaping workflows, enabling enhanced collaboration and predictive design capabilities across the industry.
Competitor
Description
vs ADSK
Dassault Systèmes
French multinational software company, known for SolidWorks (3D CAD) and CATIA (CAD/CAM). Provides a broad range of product lifecycle management (PLM) solutions.
Strong competitor in manufacturing and 3D design with a comprehensive PLM suite, often targeting enterprise-level clients with deep integration.
Bentley Systems
U.S. software company focused on infrastructure engineering software, including MicroStation (CAD) and ProjectWise (collaboration).
Direct competitor in the AEC space, particularly for large infrastructure projects, emphasizing digital twins and asset performance.
PTC Inc.
U.S. software company providing CAD (Creo), PLM (Windchill), IoT, and augmented reality solutions for manufacturing.
Competes in the manufacturing design and PLM segments, with a strong focus on connecting physical and digital products through IoT and AR.
Market Share - Global Computer-Aided Design (CAD) Software Market (2025)
Autodesk AutoCAD
31.63%
Dassault SolidWorks
12.24%
Dassault Systemes
10.2%
Others
45.93%
📊 Valuation & Analysis
📈 Wall Street Summary
Analyst Rating Distribution - 5 Hold, 23 Buy, 4 Strong Buy
5
23
4
12-Month Price Target Range
Low Target
US$275
+9%
Average Target
US$363
+44%
High Target
US$460
+82%
Closing: US$252.87 (30 Jan 2026)
🚀 The Bull Case - Upside to US$460
1. AI Integration & Innovation
High Probability
Autodesk's heavy investment in AI and generative design tools will enhance product capabilities, automate complex tasks, and increase efficiency for users, driving new adoption and upgrading cycles. This could significantly expand the addressable market by offering smarter, faster design solutions, leading to increased subscription uptake and higher average revenue per user (ARPU).
2. Growing BIM Adoption & Infrastructure Spending
High Probability
Increasing global mandates and investments in Building Information Modeling (BIM) for smart cities and infrastructure projects provide a strong tailwind for Autodesk's AEC software suite. This drives consistent demand for Revit, BIM Collaborate Pro, and Autodesk Build, boosting revenue in its largest segment. The BIM market is projected to reach US$27.12B by 2034 with a 12.9% CAGR.
3. Expanding Subscription Base & High Retention
High Probability
The successful transition to a subscription model ensures predictable recurring revenue. Continued growth in total subscriptions (7.79 million in FY2025) and high retention rates provide financial resilience. This leads to stable revenue growth and strong free cash flow, allowing for strategic investments and shareholder returns.
🐻 The Bear Case - Downside to US$275
1. Economic Sensitivity & Construction Slowdown
Medium Probability
Autodesk's reliance on the construction and manufacturing sectors makes it vulnerable to global economic downturns or reduced capital expenditure, impacting new licenses and renewals. This could result in decelerated revenue growth, lower subscription numbers, and pressure on profit margins if project starts decline significantly.
2. Intense Competition & Pricing Pressure
Medium Probability
The CAD and BIM markets are highly competitive. Aggressive pricing or innovative solutions from rivals like Dassault Systèmes, Bentley Systems, or open-source alternatives could erode market share. This may force Autodesk to reduce subscription prices or increase R&D spending, negatively impacting profitability and market dominance.
3. Restructuring Risks & Workforce Reduction
Medium Probability
The recent announcement of a global restructuring and 7% workforce reduction (approximately 1,000 positions) could disrupt operations, impact employee morale, or delay product development. This poses a risk of short-term operational inefficiencies and potential for customer dissatisfaction if support or development is affected during the transition.
🔮 Final thought: Is this a long term relationship?
Owning Autodesk for a decade appears compelling for investors confident in the sustained digitalization of design and manufacturing. Its entrenched position as an industry standard, coupled with ongoing innovation in AI and cloud, suggests a durable competitive moat. Management has demonstrated a strong track record of strategic transformation, though balancing innovation with cost efficiency post-restructuring will be crucial. Key risks include the pace of technological disruption and economic sensitivity.
📋 Appendix
Financial Performance
Metric
31 Jan 2025
31 Jan 2024
31 Jan 2023
Income Statement
Revenue
US$6.13B
US$5.50B
US$5.00B
Gross Profit
US$5.55B
US$4.99B
US$4.53B
Operating Income
US$1.37B
US$1.13B
US$0.99B
Net Income
US$1.11B
US$0.91B
US$0.82B
EPS (Diluted)
5.12
4.19
3.78
Balance Sheet
Cash & Equivalents
US$1.60B
US$1.89B
US$1.95B
Total Assets
US$10.83B
US$9.91B
US$9.44B
Total Debt
US$2.56B
US$2.63B
US$2.67B
Shareholders' Equity
US$2.62B
US$1.85B
US$1.15B
Key Ratios
Gross Margin
90.6%
90.7%
90.4%
Operating Margin
22.3%
20.5%
19.8%
string
42.43
48.84
71.88
Analyst Estimates
Metric
Annual (31 Jan 2026)
Annual (31 Jan 2027)
EPS Estimate
US$10.24
US$11.64
EPS Growth
+20.9%
+13.7%
Revenue Estimate
US$7.2B
US$8.0B
Revenue Growth
+16.7%
+11.4%
Number of Analysts
31
33
Valuation Ratios
| Metric | Value | Description |
|---|---|---|
| P/E Ratio (TTM) | 49.78 | Measures the price investors are willing to pay for each dollar of a company's past 12-month earnings, reflecting market expectations for future growth. |
| Forward P/E | 21.72 | Indicates the price investors are willing to pay for each dollar of a company's projected earnings over the next 12 months, signaling future earnings expectations. |
| Price/Sales (TTM) | 7.82 | Compares a company's market capitalization to its revenue over the past 12 months, often used for companies with inconsistent earnings or in high-growth phases. |
| Price/Book (MRQ) | 18.53 | Measures how much investors are willing to pay for each dollar of a company's net assets, indicating market valuation relative to its book value. |
| EV/EBITDA | 30.50 | Compares a company's Enterprise Value to its earnings before interest, taxes, depreciation, and amortization, providing a valuation metric independent of capital structure. |
| Return on Equity (TTM) | 40.33 | Measures how much profit a company generates for each dollar of shareholders' equity, indicating management's efficiency in using equity to generate profits. |
| Operating Margin | 25.69 | Calculates the percentage of revenue remaining after paying for operating expenses, showing the company's profitability from its core operations. |
Peer Comparison
| Company | Market Cap (B) | P/E Ratio | P/B Ratio | Revenue Growth (%) | Operating Margin (%) |
|---|---|---|---|---|---|
| Autodesk, Inc. (Target) | 53861310464.00 | 49.78 | 18.53 | 18.0% | 25.7% |
| Adobe Inc. | 120380000000.00 | 17.53 | 10.36 | 10.5% | 46.0% |
| Dassault Systèmes SE | 36200000000.00 | 26.69 | 3.68 | 6.2% | 32.8% |
| PTC Inc. | 18250000000.00 | 24.90 | 5.21 | 9.9% | 49.0% |
| Sector Average | — | 23.07 | 6.42 | 8.9% | 42.6% |