Autodesk (ADSK - Free Report) is a Zacks Rank #5 (Strong Sell) but it has the growth divergence that I love to see. What is a growth divergence? Well the Zacks Style Score for ADSK shows a D for Value and an A for Growth. Whenever I see a big divergence between the two I know I am on the right path for a growth stock. This stock has the lowest Zacks Rank, but that doesn’t mean its not worth a deeper look.
Description
Autodesk, Inc. is an American multinational software corporation that makes software products and services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries.
Earnings History
I see a good earnings history with 4 beats of the Zacks Consensus Estimate over the last year. The beats were all of size and the average positive earnings surprise over the last four quarters was 8.4%.
This isn’t why the stock has fallen to the lowest Zacks Rank, but its still good information to know.
Estimate Revisions
The Zacks Rank tells us when earnings estimates are moving up and down. As a Zacks Rank #5 (Strong Sell), we know that estimates are falling to let’s take a look at how bad it is.
I see the current quarter has slipped from $1.08 to $0.95 in the last week.
Over the same time horizon I see the next quarter dropping 8 cents to $1.10.
The full fiscal year 2022 slipped from $5.10 to $4.98, while next year is down 11 cents to $7.01.
Those are negative revisions, but they are not that big…so let’s check out the valuation
Valuation
The valuation for ADSK is a little high with a 54x forward earnings multiple. The price to book of 61x is also very high even for an asset slim business like this. The price to sales multiple of 15x is pretty high for a company posting 15% topline growth in the most recent quarter. On the bright side, I see margins improving and that is a solid sign for the future.
Chart
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Autodesk (ADSK - Free Report) is a Zacks Rank #5 (Strong Sell) but it has the growth divergence that I love to see. What is a growth divergence? Well the Zacks Style Score for ADSK shows a D for Value and an A for Growth. Whenever I see a big divergence between the two I know I am on the right path for a growth stock. This stock has the lowest Zacks Rank, but that doesn’t mean its not worth a deeper look.
Description
Autodesk, Inc. is an American multinational software corporation that makes software products and services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries.
Earnings History
I see a good earnings history with 4 beats of the Zacks Consensus Estimate over the last year. The beats were all of size and the average positive earnings surprise over the last four quarters was 8.4%.
This isn’t why the stock has fallen to the lowest Zacks Rank, but its still good information to know.
Estimate Revisions
The Zacks Rank tells us when earnings estimates are moving up and down. As a Zacks Rank #5 (Strong Sell), we know that estimates are falling to let’s take a look at how bad it is.
I see the current quarter has slipped from $1.08 to $0.95 in the last week.
Over the same time horizon I see the next quarter dropping 8 cents to $1.10.
The full fiscal year 2022 slipped from $5.10 to $4.98, while next year is down 11 cents to $7.01.
Those are negative revisions, but they are not that big…so let’s check out the valuation
Valuation
The valuation for ADSK is a little high with a 54x forward earnings multiple. The price to book of 61x is also very high even for an asset slim business like this. The price to sales multiple of 15x is pretty high for a company posting 15% topline growth in the most recent quarter. On the bright side, I see margins improving and that is a solid sign for the future.
Chart
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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