QUOTE AND NEWS
Forbes  Aug 20  Comment 
The latest tally of analyst opinions from the major brokerage houses shows that among the components of the S&P 500 index, Autodesk (ADSK) is now the #69 analyst pick, moving up by 25 spots.
Benzinga  Aug 18  Comment 
CNBC Fast Money's Pete Najarian said on the show that Autodesk (NASDAQ: ADSK) got oversold last week. He likes the stock and he thinks that it is going higher. Autodesk gained 2.15 percent and it closed at $53.79 on Monday. Jim Lebenthal is a...
StreetInsider.com  Aug 18  Comment 
The following is a list of notable articles to help get you through the lunch hour: Microsoft (MSFT) Begins Roll Out of Latest Xbox One Update -> Read this! Hertz Global (HTZ) Sees Upside on Positive Chatter -> Read this! Goldman Sachs...
Benzinga  Aug 16  Comment 
Pete Najarian spoke on CNBC's Stock Pops & Drops about Autodesk (NASDAQ: ADSK). He was surprised to see the stock trading 6.43 percent lower because the company posted better-than-expected earnings and revenues and it also raised its guidance....
Benzinga  Aug 15  Comment 
Following the company's second quarter earnings report, Pacific Crest has raised its price target and estimates for Autodesk (NASDAQ: ADSK) and maintained an Outperform rating. The team at Pacific Crest commented, "Consistent with checks,...
TheStreet.com  Aug 15  Comment 
NEW YORK (TheStreet) -- Autodesk  fell Friday despite the software company's second-quarter earnings that beat analysts' expectations. Autodesk reported adjusted earnings of 35 cents a share, down year-over-year from 45 cents a share, to beat...
Benzinga  Aug 15  Comment 
In a report published Friday, Bank of America analyst Kash Rangan reiterated a Neutral rating on Autodesk (NASDAQ: ADSK), and raised the price target from $53.00 to $62.00. In the report, Bank of America noted, “ADSK beat revenue and EPS...
Benzinga  Aug 15  Comment 
In a report published Friday, Morgan Stanley analyst Keith Weiss reiterated an Overweight rating and $65.00 price target on Autodesk (NASDAQ: ADSK). In the report, Morgan Stanley noted, “Twin engines of a robust commercial construction...
SeekingAlpha  Aug 15  Comment 
By AtonRa Partners: Autodesk (NASDAQ:ADSK) delivered once again strong quarterly figures, with both revenues ($637m vs. consensus of $604m) and EPS ($0.35 vs. consensus of $0.28) coming in ahead of expectations. Revenue growth accelerated to 13%...
SeekingAlpha  Aug 15  Comment 
By SA Transcripts: Autodesk, Inc. (NASDAQ:ADSK) Q2 2015 Results Earnings Conference Call August 14, 2014, 05:00 PM ET Executives David Gennarelli - IR Carl Bass - CEO Sue Pirri - VP, Finance Analysts Brent Thill – UBS ...




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Autodesk (NASDAQ:ADSK) sells Computer Aided Design (CAD) software, which is used by engineers and architects to mock up designs for products and buildings. While Autodesk's competitors sell advanced software with a $10,000 price tag to niche audiences, Autodesks's "AutoCAD" sells for a relatively modest $4,000, making it the de facto standard with 85% market share. The software's price means AutoCAD is the only option for smaller firms - a market the company's competitors have only recently begun to target.

Autodesk's large customer base (at 85% market share more than 8 million AutoCAD users) is itself a competitive advantage. CAD software is technical and tricky to learn, and therefore switching costs are high. As the defacto standard, most new professionals who need to use CAD software learn AutoCAD. This represents an enormous advantage for ADSK, as competitors will find it difficult to break through this standard.

The company has grown revenues by convincing customers to switch to a subcription model for AutoCAD software. In this model, customers get automatic updates and new features in exchange for a recurring fee. The model is much more profitable for Autodesk - only 22% of Autodesk's customers buy software in this way, but they account for nearly half of the revenues.

Company Overview

Since 2003, Autodesk has shown constant growth in their revenues and kept the same hold on the market. AutoCad happens to be the standard in the market, primarily because it takes time to unlearn the design software and learn a new standard. Moreover, Autodesk has traditionally focused on the mid market segment,the largest segment in the market, whereas their nearest competitors have been focusing on the higher end segment. The company has focused on converting their customers to a subscription plan as well, so that they can make more revenue per client.

Trends and Forces

Industry wide Transition from 2D to 3D

Autodesk is trying to increase the adoption of “next generation” 3D software products as compared to the 2D market. It recognizes that the 3-D segment would be a key driver for growth for the company in the future. This would definitely provide Autodesk with the opportunity to up-sell its massive 2-D installed base into higher average sales price (ASP) 3-D software and to boost growth.

Dominance of AutoCad in the market

Competitors in 2-D CAD are quite small, with none exerting significant independent threats to Autodesk’s position. AutoCad and AutoCad LT continuously drive up the sales for the company. They are touted to be the “crown jewels” of Autodesk, accounting for approximately 44% of revenue and 36% of licensing revenue last fiscal year. Until now, the products have doing well in the market. However, an increasing focus on this segment by their competitors, namely UGS who is commoditizing its 2-D software and allowing users to download it online, highlights a trend that might catch on in the future, and prove harmful to Autodesk.

Piracy and Counterfeiting problem

One of the major problems faced by many IP holding companies is the issue of their products being copied and being sold for a cheaper price in the markets, more so in the developing world(see concept: China's Piracy & Counterfeiting Problems). Since the country is unable to safeguard the Intellectual Property rights of many companies, Autodesk happens to be one of those to be hit by such infractions as imitators come up with cheaper versions of their products.

Slowing US economy

Autodesk has become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions. As economic growth in the United States and other countries slows down, many customers may delay or reduce technology purchases. Since Autodesk controls a lions share of the market, they would be more prone to the market changes in US.

Competition

Autodesk controls over 85% of the market, primarily because of the fact their competitors have been focusing on a more premium market segment. Recently, Dassault and UGS have made forays into the mainstream or mid-market with product level CAD software selling in the $4,000-$5,000 per seat range, which is Autodesk’s core market.

A comparison of the sales of CAD units for the main competitors portrays Autodesk's position in the market. Competitors in 2-D CAD are quite small, with none exerting significant independent threats to Autodesk’s position.

However, one of the main development in this market has been, UGS (Siemens) has indicated that there have been over 33,000 downloads of the Solid Edge 2- D drafting tool in the four months since its introduction. While the number of downloads does not pose any major threat, UGS’s decision reflects a belief by some that basic 2-D tools will become commoditized and could be given away for free in an effort to help drive 3-D adoption.

Notes

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