The disappointing results left investors wondering if the company has hit a threshold for sales.
For the second quarter, analysts have projected a 29%
growth in total revenues to $786.98 million,
while the bottom-line projection is pegged at 61 cents per share. The
management, meanwhile, expects revenue to be $782 million to $792 million. GAAP
EPS is expected to be $0.13-0.17 while adjusted EPS is expected to be
$0.59-0.63.
While software-as-a-sales (SAAS) model is
generally considered a highly profitable model, the fact that Autodesk caters
to a niche segment narrows down its prospects. This is why the company is
forced to shell out huge sums in marketing costs to reach out to maximum number
of architects and engineers around the globe.
On the other hand, the company has high retention rates to its credit, given that users tend not to move away to rival software after years of training in Autodesk software. Hence even if the growth decelerates, solid recurring revenues should keep the stock momentum on.
The stock has gained 12% in the year-to-date period. The stock has a 12-month average price target of $173.82, suggesting a 20% upside from the last close.