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Here's What to Expect From Autodesk's (ADSK) Q1 Earnings

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Autodesk (ADSK - Free Report) is set to report first-quarter fiscal 2020 results on May 23.

The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 33.2%.

In the last reported quarter, Autodesk benefited from solid growth in subscription revenues that accounted for 74.6% of total revenues. The company also witnessed growing traction in the adoption of BIM 360 solutions.

For the first quarter, Autodesk expects revenues between $735 million and $745 million. Non-GAAP earnings are anticipated to be 44-48 cents per share.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 47 cents, unchanged over the past 30 days. Further, the consensus mark for revenues is pegged at $74.7 million, up 32.3% from the figure reported in the year-ago quarter.
 

Autodesk, Inc. Price and EPS Surprise

Autodesk, Inc. Price and EPS Surprise

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

Let’s see how things are shaping up for the upcoming announcement.

Factors Likely to Influence Q1 Results

Autodesk’s first-quarter results are expected to benefit from robust growth in subscription revenues, rapid adoption of BIM 360 products and success of the maintenance to subscription (M2S) program.

Strong annual recurring revenues (ARR), which were up 34% year over year in the last reported quarter, validate the success of the company’s business model transition and indicates solid overall growth.

Notably, the company’s heightened promotional activity that includes discount on AutoCAD and AutoCAD LT 2020 is likely to boost ARR in the soon-to-be-reported quarter. Increased ARR will benefit second-quarter fiscal 2020 revenues.

Additionally, acquisitions of Assemble Systems, PlanGrid and BuildingConnected have strengthened the company’s expertise in preconstruction capabilities, document-centric workloads & field execution, and bidding & risk management, respectively. These have helped Autodesk strengthen its construction business that is likely to drive the top line.

However, sluggish growth in Maintenance revenues due to continued migration of maintenance plan subscriptions to subscription plan is expected to hurt top-line performance.

Moreover, rising expenses due to increased hiring and acquisitions are expected to hurt the company’s profitability in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Meanwhile, the Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

Autodesk has a Zacks Rank #3 and an Earnings ESP of +0.18%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With a Favorable Combination

Here are some other companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Verint Systems (VRNT - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Momo Inc. (MOMO - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #2.

Intuit (INTU - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank #2.

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