Shares of Autodesk (ADSK) are up about 50 percent in 2017, and nearly 92 percent over the past year. It would seem the stock could be more than slightly ahead of itself.
The stock is up about 15 percent on May 19th, after reporting strong fiscal first-quarter 2018 results. For the quarter, the company reported revenue of $485.7 million, down from $511.9 million a year ago. The company had a GAAP net loss of $129.6 million, better than the loss of $167.7 million y/y. On a non-GAAP basis, Autodesk reported a diluted loss per share of $0.16, compared to a loss per share of $0.10 last year. Analysts had been looking for the company to report a loss of $0.24 on revenue of $470.22, a beat on both the top and bottom lines.
For the fiscal second quarter, Autodesk is projecting revenue in the range of $488 million to $500 million, or $494 million at the mid-point. The company is also guiding a second-quarter loss per share in the range of $0.14 to $0.18, or a loss of $0.16 per share at the mid-point.
Analysts are looking for the company to report revenue of $492.53 million and a loss per share of $0.16. For the full-year fiscal 2018, the company is guiding revenue in the range of $2.00 billion to $2.05 billion, or $2.025 billion at the mid-point, and a non-GAAP loss per share of $0.56 to $0.73, or a loss of $0.65 per share. Analysts had been looking for revenue of $2.032 billion, and a loss per share of $0.59.
Autodesk reported subscription plans increased by 233,000 from the fourth quarter to 1.32 million.
The numbers on the surface seem healthy on the quarter, and the guidance seems roughly in-line to slightly better than analyst expectations. The stock's strong move higher is likely a reflection of results coming in than expected, more so than the guidance. The guidance for the full-year is only slightly better than estimated on revenue and in-line with EPS.
The stock is surely not cheap on 2019 forward P/E at around 93.
The fiscal 2020 EPS certainly brings ADSK's valuation down, but the numbers on the earnings multiple are still closing in on 40.
Analysts are also expecting revenue growth to accelerate.
Short interest for the stock indeed seems on the higher side, suggesting many may have been expecting results to have missed, resulting in potentially some short covering today.
Going through the numbers and future expectations tells a story of a long-term growth play that, if successful, could potentially pay off. The data right now suggest the stock may be slightly ahead of itself, though.
Time will tell.
Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management, LLC a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.