Here's Why Autodesk, Inc. Is Soaring Today
Shares of Autodesk (NASDAQ: ADSK) rose 14% as of 10:40 a.m. EDT Friday. Shareholders can credit the big jump to the release of better-than-expected earnings.
Here's a review of the headline numbers from the company's second quarter:
- Revenue increased 22% to $611.7 million. This figure came in $6 million ahead of the top end of management's guidance range.
- Subscription plan Annualized Recurring Revenue (ARR) grew 115% to $1.68 billion. Total ARR grew 28% to $2.35 billion.
- Non-GAAP expenses only grew by 5% and enabled the company to produce Non-GAAP earnings per share of $0.19. That was a nice reversal from the $0.11 loss that was recorded in the year-ago period and was comfortably ahead of the $0.16 in EPS that Wall Street had expected.
Turning to guidance, here's what management is projecting for the upcoming quarter:
- Revenue will land between $635 million and $645 million. This represents growth of 23% to 25%. For context, traders were only expecting revenue of $634 million, so this guidance is a surprise on the upside.
- Non-GAAP EPS is expected to land between $0.24 and $0.28. Wall Street was projecting EPS of $0.28, so this guidance is a bit of a disappointment. However, the company has a history of providing conservative guidance.
As for the full-year, management boosted the low end of its revenue and EPS guidance by $30 million and $0.10, respectively. Here's what the updated numbers look like for fiscal year 2019:
|Metric||Fiscal 2019 Guidance||Fiscal 2018 Actual||Change at Midpoint|
|Revenue||$2.485 billion to $2.505 billion||$2.06 million||21%|
|Non-GAAP EPS||$0.87 to $0.95||($0.48)||N/A|
Overall, it was a wonderful quarter, so it's understandable why shares are flying high today.
Autodesk is on a roll in 2018. The bullish move makes sense given the company's ability to consistently beat its earnings expectations and boost guidance.
There's no doubt that Wall Street is pricing this business for growth -- shares are currently trading for 16 times sales and 49 times next year's earnings estimates -- but with plenty of room left for expansion, this Fool thinks that Autodesk is still a great stock for investors to check out today.
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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.