NEW YORK ( TheStreet) -- Autodesk (Nasdaq: ADSK) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 15.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ADSK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, ADSK has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
  • AUTODESK INC has improved earnings per share by 39.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AUTODESK INC increased its bottom line by earning $0.90 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($1.69 versus $0.90).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 35.8% when compared to the same quarter one year prior, rising from $53.60 million to $72.80 million.

Autodesk, Inc. provides design software and service solutions to customers in architecture, engineering, and construction; manufacturing; and digital media and entertainment industries. The company has a P/E ratio of 31.7, equal to the average computer software & services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Autodesk has a market cap of $7.8 billion and is part of the technology sector and computer software & services industry. Shares are down 12% year to date as of the close of trading on Wednesday.

You can view the full Autodesk Ratings Report or get investment ideas from our investment research center.
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