Why Autodesk (ADSK) Stock Fell Today

NEW YORK (TheStreet) -- Autodesk (ADSK) fell 2.1% to $47.32 Friday as tech stocks and the Nasdaq slid after a morning rally.

Shares of the software company traded as low as $46.54 in intraday trading. About 4.9 million shares of Autodesk were traded Friday, above the daily trading volume of about 3 million shares a day.

Autodesk stock fell 3.6% over the past week, and 1.2% in the past 3 months. The stock gained 13.7% in the last 6 months.

Other tech stocks hit Friday include Amazon (AMZN), Netflix (NFLX), and eBay (EBAY).

ADSK Chart

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TheStreet Ratings team rates AUTODESK INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AUTODESK INC (ADSK) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has increased to $183.50 million or 17.93% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.87%.
  • Despite currently having a low debt-to-equity ratio of 0.33, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.51 is very high and demonstrates very strong liquidity.
  • The gross profit margin for AUTODESK INC is currently very high, coming in at 93.40%. Regardless of ADSK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ADSK's net profit margin of 9.18% is significantly lower than the industry average.
  • AUTODESK INC's earnings per share declined by 28.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, AUTODESK INC reported lower earnings of $0.99 versus $1.07 in the prior year. This year, the market expects an improvement in earnings ($1.14 versus $0.99).
  • ADSK, with its decline in revenue, underperformed when compared the industry average of 10.9%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: ADSK Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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