NEW YORK (TheStreet) -- Shares of Autodesk (ADSK) are slightly lower by 0.31% to $58.92 in morning trading Thursday, ahead of the application software company's third quarter earnings release after the market close today.
For the third quarter, analysts are expecting the company to post earnings of 22 cents per share, lower compared to the 39 cents per share Autodesk delivered a year ago.
Analysts forecast revenue of $601.88 million for the quarter, up from the $555.2 million the company reported in the same quarter of last year.
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San Rafael, CA-based Autodesk is a design software and service company, specializing in the 3D design, architecture, engineering and construction; manufacturing; and digital media, consumer and entertainment industries.
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 revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ADSK's revenue growth trails the industry average of 28.1%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $96.20 million or 47.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.01%.
- 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. Despite the fact that ADSK's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.96 is high and demonstrates strong liquidity.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 49.3% when compared to the same quarter one year ago, falling from $61.70 million to $31.30 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Software industry and the overall market, AUTODESK INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ADSK Ratings Report