NEW YORK ( TheStreet) -- I always marvel at how quickly the Street can shift its stance on a company whenever convenient, even though the narrative has not drastically changed.
Last summer, when Autodesk (ADSK) shares dropped to $33 per share, (at the time, a two-month decline of 20%), analysts complained that management had done a poor job of identifying the company's next strategic move. There were also concerns that the architectural software designer was confused about what phase of growth it was in.
Making matters worse, despite the stock's decline, the Street insisted that shares were expensive. Although I believed that execution fears were exaggerated, the valuation concerns were valid. At the time, Autodesk investors didn't see a problem paying 3-times the multiple of Microsoft (MSFT) and almost 4-times that of rival Cadence Design (CDNS).
But beyond Autodesk's stock price, there was plenty to love. I credited management for how well they have navigated a tough IT spending environment, and the company maintained decent margins and executed some tough cost-control initiatives.It didn't seem as if investors' expectations aligned with the company's absolute performance. Although the company was struggling with license revenue, the results didn't diverge that drastically from license results from Oracle (ORCL) and Red Hat (RHT). But I was in the minority. Fast-forward six months later, Autodesk stock is at $55, up 66%. Analysts now pretend they'd sided with the company all along. The current sentiment is excitement with the company's proposed changes. This includes an entry in the SaaS (software as a service) model. Although the company's fundamentals remain strong, it's too early to predict the value Autodesk can extract from the improved global manufacturing economy. There are reasons to be optimistic, but the environment is far from robust.
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