Autodesk Stock: Analysts Expect Big Gains in 2020

Autodesk stock

Autodesk (NASDAQ: ADSK) stock is likely to outperform again in 2020 amid robust growth in spending and digitalization. Analysts are suggesting investors play with the software stocks for big gains in the coming years. Autodesk is among the top picks. This is because of its strong financial and share price performance in 2019.

In addition, the robust outlook for 2020 is adding to investor’s sentiments. Autodesk stock price rose more than 30% in the last three months alone. Autodesk share price is currently trading around $190, slightly down from a 52-weeks high of $193. The software company does not offer dividends. Thus, it appears in a position to invest significantly in growth opportunities.

ADSK Autodesk, Inc. daily Stock Chart

Analysts Raised Autodesk Stock Price Target

The market analysts are showing confidence in the future fundamentals of Autodesk and the software market. Wells Fargo is expecting the software industry to outperform in 2020. This is due to strong spending growth indicators. Its analyst Philip Winslow anticipates software spending to increase in the range of 10.2% CAGR in the following three years. The growth rate is 2.5x faster than the rest of the IT industry.

Its analyst raised the Autodesk share price target to $200. Stifel and Morgan Stanley also lifted the price target for ADSK shares. Stifel says faster-than-expected revenue and FCF growth is likely to support share price momentum.

Financial Numbers are Supporting Upside

The software company had generated 27.5% year over year revenue growth in the latest quarter. Its earnings exceeded analysts’ expectations by $0.06 per share.

The total ARR grew 28% to $3.22 billion while billings jumped 55% to $1.01 billion. The company expects to accelerate the revenue growth trend in the following quarters. Therefore, holding this stock for more gains appears like a good investment strategy.

Andrew Anagnost, Autodesk president, and CEO said, “The breadth and depth of our product portfolio in Construction paved the way for another strong quarter. In Manufacturing, we continue to displace competitors and grow faster than the overall market.”

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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