Autodesk (ADSK) Stock Falls on Lower Subscription Guidance

Autodesk (ADSK) stock is declining after the company lowered its net subscription additions guidance for the 2016 fiscal year.
By Amanda Gomez ,

NEW YORK (TheStreet) -- Autodesk (ADSK) - Get Report stock is decreasing 3.49% to $60.21 on heavy trading volume on Friday afternoon after the company lowered its 2016 fiscal year new subscription additions to 310,000 to 330,000, from the previous outlook of 375,000 to 425,000.

The main revenue source for the San Rafael, CA-based company, which designs and sells software and services for business solutions, has transitioned to subscription-based services from licensed products.

"We just thought we'd be a little bit more cautious and conservative," CEO Carl Bass said during the third quarter earnings call on Thursday after the market close.

"Because of the difficulty in projecting our customer behavior precisely about whether they'll choose to stock up on perpetual licenses or move to desktop subscription, it's a little bit harder to project," he noted.

Additionally, the company boosted its full year earnings outlook to 72 cents to 76 cents per share from 60 cents to 72 cents.

Autodesk also updated its fiscal 2016 revenue guidance by lowering its top line guidance to $2.5 billion from $2.51 billion, and increasing its low end guidance to $2.48 billion from $2.47 billion.

So far today, 6.44 million shares of Autodesk have exchanged hands, compared with its average daily volume of 4.07 million shares.

Separately, TheStreet Ratings team rates AUTODESK INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate AUTODESK INC (ADSK) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

You can view the full analysis from the report here: ADSK

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Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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