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Factors Setting the Tone for Autodesk's (ADSK) Q3 Earnings

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Autodesk (ADSK - Free Report) is slated to release third-quarter fiscal 2021 results on Nov 24.

The company anticipates to report revenues between $930 million and $945 million for the fiscal third quarter. It projects non-GAAP earnings to be in the range of 91-97 cents per share.

The Zacks Consensus Estimate for fiscal third-quarter 2021 earnings has remained steady at 95 cents per share over the past 30 days, suggesting an increase of 151.3% from the year-ago quarter reported figure.

Further, the consensus mark for revenues is pegged at $940 million, suggesting an increase of 11.5% from the year-ago quarter reported figure.

Autodesk’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.73%.
Let’s see how things have shaped up for the upcoming announcement.

Autodesk, Inc. Price and EPS Surprise

Autodesk, Inc. Price and EPS Surprise

Autodesk, Inc. price-eps-surprise | Autodesk, Inc. Quote

Factors to Consider

Autodesk’s fiscal third-quarter performance is expected to have benefited from robust growth in subscription revenues and rapid adoption of maintenance-to-subscription (M2S) program.

Additionally, steady renewals and strength in new customer billings are expected to have driven top-line growth in the quarter.

Autodesk Construction Cloud has been gaining traction with owners, general contractors and subcontractors across the construction industry, which is expected to have aided top-line growth in the soon to-be reported quarter.

During the quarter, Autodesk launched a model coordination workflow between two of its flagship products, Navisworks and BIM 360 Model Coordination in the to-be reported quarter. The new integration further strengthened Autodesk Construction Cloud by enabling construction teams to manage the entire model coordination workflow including clash detection and issues management in a common data environment from within a single solution.

Moreover, Autodesk’s investment in Aurigo Software is likely to have helped it to fortify its construction business, in turn, bolstering the top line. Aurigo’s integration with Autodesk Construction Cloud, a powerful portfolio of construction management software and services, gives owners a single end-to-end technology platform for design, planning, construction and operations of infrastructure and private assets.

Meanwhile, the international expansion of BuildingConnected, a construction management solution that centralizes and streamlines the bidding process as well as encompasses the Autodesk Construction Cloud builders network, in the fiscal third quarter is expected to have aided top-line growth. With this international expansion, the BuildingConnected solution is now available in the United Kingdom, Ireland, Australia and New Zealand.

Nonetheless, sluggish growth in Maintenance revenues due to the continued migration of maintenance plan subscriptions to subscription plan might have negatively impacted top-line performance.

Moreover, spending on software is likely to have declined as commercial IT buyers and consumers implemented rapid cuts in capital spending, in line with declining revenues, profits, market valuations, and employee headcount due to coronavirus-led business uncertainty. The top line is expected to reflect the impact of the decline in spending when the company reports.

Key Developments in Q3

During the fiscal third quarter, Autodesk announced the completion of the acquisition of Pype, a provider of cloud-based solutions for automating construction project management workflows. This acquisition is expected to provide additional value to Autodesk Construction Cloud users, allowing general contractors, subcontractors, and owners to automate workflows such as submittals and project closeout to increase overall productivity, and reduce risk throughout the project lifecycle.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Autodesk has an Earnings ESP of +1.97% but a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Central Garden & Pet Company (CENT - Free Report) has an Earnings ESP of +57.14% and holds a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Momo (MOMO - Free Report) has an Earnings ESP of +5.41% and a Zacks Rank #3.

DocuSign (DOCU - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #3.

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