Autodesk (ADSK) Stock Dropping on Negative Analyst Note

NEW YORK (TheStreet) -- Shares of Autodesk (ADSK) are declining, down 1.07% to $49.87 after KeyBanc lowered its 2016 earnings estimate to $0.99 from $1.01 per share.

The firm also lowered fiscal year 2015 second quarter revenue estimates to $604.3 million from $610.1 million, with earnings estimates decreased to $0.14 from $0.16 per share.

Autodesk resellers in the U.S., U.K., Germany, Canada and Benelux generally appear to be behind plan, KeyBanc noted.

"Reseller feedback has lagged actual results for the past several quarters, and expectations are for a 4% decline in revenue," KeyBanc analysts said.

KeyBanc maintained its "overweight" rating with a price target of $81 on the stock.

Autodesk is a design software and services company, offering customers productive business solutions through technology products and services.

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, 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 a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

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

  • The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 9.1%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.34, 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 1.69 is high and demonstrates strong liquidity.
  • The gross profit margin for AUTODESK INC is currently very high, coming in at 90.27%. 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 2.95% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to $86.50 million or 60.44% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • In its most recent trading session, ADSK has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: ADSK Ratings Report

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