Posts Tagged ‘HD’

Autodesk (ADSK) has its earnings call next week.

Recently Caterpillar (CAT), John Deere (DE), and The Home Depot (HD) all nicely surprised to the upside.  Could these proxies bode well for ADSK, too?

While the market was down today, ADSK was actually up most of the session and only dipped as the Nasdaq took a dive toward the close.  I think this show of strength is a positive sign as well.

I get that ADSK is expensive, in transition, etc., etc. But I used to compete against AutoCAD. They own the market.  Actually, they own a few markets, including general CAD and Hollywood animation stuff.  Both construction and Hollywood are on fuego, yet more positive indicators.

I also get that ADSK stumbled after their last earnings call.  From an all-time high, the stock tumbled some 20%.

As best as I could determine, though, it was a series of items blown out of proportion that stung them.

For example:

* They announced a layoff, which always sounds bad.

But when you listened to the conference call (and subsequent CEO interview), the layoff wasn’t a, “we’re doing badly” kinda layoff, rather, it was a, “we’re changing our business model from product to subscription so that’s going to streamline our infrastructure” thing.  In other words, it sounds like good, proactive management.

* ADSK had a few less subscribers than expected, and they lowered the top end of their subscriber projections from 675K to 650K, which also sounds bad.

But people didn’t want to hear the reason why: Because they’re finding that each subscription is worth more than they thought.

I thought the CEO was very open and positive about this… he said subscriptions is a relatively new thing for ADSK so they’re still learning how to project appropriately… and he immediately followed that up with something to the effect that while they guessed subs a bit too high (in actuality off by less than 3%), they guessed a bit too low on the value of each subscription (sub revs were up over 105.6%), which the CEO (and I!) thought was a perfectly fine trade-off.

Note they kept the low end of the range (625K) intact, which I think is also a good sign (i.e., nothing is “crumbling”).

* The headlines were wrong! Investors.com said, “… delivered disappointing fiscal third-quarter results and guidance”… yet, they beat on both the top and bottom lines and revised guidance upwards. I firmly believe that — in the rush to get out news — if the starting headlines are wrong, unfortunately everyone follows suit… in these days of instant news, there simply isn’t time to properly analyze.

Of course I’m trying to read tea leaves here… but I think ADSK could see an earnings pop… maybe amplified by what I believe was an overdone (erroneous?) pounding after last earnings release.  We’ll see next week!

 

3/7/18 UPDATE:  ADSK REPORTED EARNINGS YESTERDAY AND TODAY WAS UP ALMOST 15%.  :)

 

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