Analysts at investment bank Berenberg believe that the quality of Autodesk’s (ADSK:NASDAQ) business is not fairly reflected in its current share price. Shares in the architecture and engineering design software provider closed at $224.01 on 8 December, 21% up on where they started 2023, below the 39% gain of the wider Nasdaq index.

Berenberg calls Autodesk a ‘double-digit growth company’ even in the face of a tough macro backcloth. ‘We estimate that revenues will grow at a 11.9% compound annual growth rate over the next two years (consensus: 9.8%) and that the business will reach an adjusted-earnings before interest and tax margin of 37% by FY27.’

FORECASTS BEATEN

Most recent quarterly revenue and earnings (21 Nov) beat consensus expectations at $2.09 earnings per share (consensus $1.99) on $1.41 billion revenue ($1.39 billion), representing more than 10% growth.

Using Autodesk software on a design project / Image source: Adobe

Key tailwinds include the company’s new Australian distribution model, which Berenberg believes will be rolled out globally in future. The analysts calculate that this will generate a 1.3% CAGR contribution across full year 2025 and 2026. ‘Furthermore, the company’s Autodesk University event last month increased our conviction that Autodesk will emerge as a winner from the next digitisation wave in the construction space.’

Berenberg raised its target price for the stock to $255, implying around 14% upside from current levels.

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