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Autodesk (ADSK) Boosts AEC Capabilities With The Wild Buyout

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Autodesk (ADSK - Free Report) recently announced entering into a definitive agreement to acquire The Wild, a start-up that provides a cloud-connected extended reality (XR) platform, in an effort to boost its Architecture, Engineering and Construction (AEC) business capabilities. However, the company didn’t disclose the financial terms of the transaction.

XR is an umbrella term that includes augmented reality (AR), virtual reality (VR), mixed reality and other computer-generated immersive environments. The technology merges the physical and virtual worlds, thereby letting users experience and interact beyond their physical space and the reality of what they can see, hear or feel.

Founded in January 2017, The Wild has developed two XR platforms, which include its namesake solution, The Wild and IrisVR, which offer on-demand and in-context opportunities for deeper team collaboration.

The company’s software platforms allow architects, engineers and other professionals involved in a construction project to collaborate and review digital models of projects together by using VR headsets from anywhere in the world. The company is currently serving more than 700 customers worldwide across its two platforms.

The Wild Buyout to Boost Autodesk’s AEC Capabilities

The AEC industry is increasingly using AR and VR technologies to collaborate with professionals throughout the project delivery lifecycle amid the pandemic-led remote working trend. The adoption of XR is likely to further accelerate due to the technology’s increased affordability.

The cost of professional grade AR and VR equipment has decreased robustly in the past few years. At present, AR/VR headsets cost a few hundred dollars instead of thousands. Also, currently, most smartphones support AR, thereby making the XR technology accessible to anyone, anywhere and anytime.

Additionally, the adoption of XR technology will eliminate the need for in-person team collaboration requirements throughout the project delivery lifecycle, thereby saving costly travel expenses and time.

Therefore, The Wild’s acquisition makes sense for Autodesk as it will boost its AEC business capabilities and help win new clients in the space. The AEC business is the largest operating segment of the engineering software giant, which accounted for approximately 44% of fourth-quarter fiscal 2022 total revenues. The segment’s revenues jumped 17% year over year to $528 million in the quarter.

Autodesk’s Growth Through Acquisitions

Autodesk makes frequent investments in businesses, software solutions and technologies that it deems complementary to the company’s business through acquisitions and strategic collaborations.

Earlier this year, ADSK completed the acquisition of California-based ProEst, which specializes in the development of cloud-based estimating software solutions for companies in the construction domain.

In May 2021, Autodesk completed the takeover of Toronto-based Upchain. The company specializes in providing cloud-based product lifecycle management and product data management software solutions.

In March 2021, Autodesk completed the acquisition of Innovyze, Inc, specializing in the development of water infrastructure software solutions. Last year, ADSK purchased Spacemaker AS to strengthen its early-stage design and outcome-based design capabilities.

Autodesk’s acquisitions of Pype (2020), Assemble Systems (2018), and BuildingConnected (2018) and PlanGrid (2018) also bolstered its Construction cloud platform.

Zacks Rank & Stocks to Consider

Currently, Autodesk carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader technology sector include Jabil (JBL - Free Report) , Broadcom (AVGO - Free Report) and Apple (AAPL - Free Report) . While Jabil sports a Zacks Rank #1 (Strong Buy), Broadcom and Apple each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Jabil’s third-quarter fiscal 2022 earnings has been revised upward to $1.62 per share from $1.46 30 days ago. For fiscal 2022, earnings estimates have been revised upward by 67 cents to $7.25 per share in the past 30 days.

Jabil’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 13.5%. Shares of JBL have rallied 22.2% over the past year.

The Zacks Consensus Estimate for Broadcom’s second-quarter fiscal 2022 earnings has been revised upward by 10.2% to $8.64 per share over the past 30 days. For fiscal 2022, earnings estimates have moved upward by 7.1% to $35.49 per share over the past 30 days.

Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.9%. Shares of AVGO have rallied 33.1% in the trailing 12 months.

The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by five cents to $1.43 per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by a penny to $6.16 per share in the past 30 days.

Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. AAPL stock has rallied 44% over the past year.


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