Autodesk Stock Forecast: Why We Remain Bullish On Autodesk

motek 1This Autodesk stock forecast article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • We reiterate the March 2019 buy recommendation we gave to ADSK. This software company can endure this pandemic better than others.
  • Autodesk will emerge stronger after this COVID-19 pandemic is over. It is adapting its software products to align with the work-from-home trend.
  • The AI-infused Fusion 360 from Autodesk is the best work-at-home software product for architects, engineers, and CAD artists.
  • The global construction business will outgrow any pandemic. Governments and banks are willing to extend emergency loans to hard-up construction-related firms.

This pandemic is not going to handicap Autodesk’s annual recurring revenue. Big engineering and architectural firms pay for one-year/multi-year software subscriptions. Like many others, we are also underwater with Autodesk (ADSK). This stock’s big plunge from trading over $200 in February to just over $152 is painful even its only paper losses. Nevertheless, we remain hopeful that this software subscriptions-driven company’stock will recover after this COVID-19 pandemic is solved. The invidious leadership position of Autodesk in CAD/CAM software still makes it a buy.

autodesk stock forecast
(Source: Seeking Alpha)

We reject the hypothesis that Autodesk has too much cyclical exposure. The notable discounts in signing-up for one-year or multi-year software subscription plans is compelling for big and small companies. Only freelancers who pay for month-to-month subscriptions are vulnerable to cyclical rollercoaster uncertainty. We insist that the growing annual recurring revenue (or ARR) of Autodesk is not endangered by COVID-19. Q4 2019 showed Autodesk’s ARR went up by 25% to $3.43 billion. Taking into account the near-term effect of COVID-19 pandemic, we still expect Autodesk to wrap up Fiscal 2020 with ARR of around $3.8 to $4 billion. Most of that will come from subscription fees – probably around $3.6 billion).

More importantly, we believe that the $10 trillion global construction industry (which is the largest customer of AutoCAD software) is resilient against any pandemic. The resilience and prosperity of the construction industry is very important in evaluating Autodesk as a long-term investment. Architecture, Engineering, and Construction or AEC contributed $1.4 billion to Autodesk’s Fiscal 2020 revenue of $3.27 billion. No thanks to COVID-19, we cannot expect AEC to replicate its 35% Y/Y performance. Maybe it will in the high twenties but its not feasible anymore for AEC to do another 35% Y/Y in Fiscal 2021. Barring a 3-month quarantine due to COVID-19, it is still feasible for AEC to deliver 25% Y/Y growth.

autodesk stock forecast
(Source: Autodesk)

The point is that Autodesk already got paid for annual or multi-year software subscriptions. The AEC-related companies are not going to cancel their already paid for AutoCAD or Revit subscriptions just because of COVID-19.

A Probable Recession Culls The Weak And Strengthens The Sturdy

ADSK remains a safe investment when you learn that governments are willing to extend zero-interest loans to COVID-19 affected companies. Even my Third World-country, the Philippines, is offering cash subsidies and cheap loans to pandemic-punished firms. Our takeaway is that there’s little risk that many construction/engineering firms will go bankrupt. Private and government-owned banks will step in to bail-out struggling companies. The only companies that will likely go bankrupt from COVID-19 are those firms that are already on the brink of bankruptcy even before this pandemic emerged.  

In other words, a recession is the natural way of culling sick companies. The engineering and construction firms that can survive a pandemic-induced recession will emerge stronger. They become stronger because there will be less competition. A stronger company becomes a better long-term customer of Autodesk’s pricey ($2,965 per year per single-user) AEC software product bundle. The invidious ability of Autodesk to price its products at high-margins and still keep loyal customers made it a very sturdy company. Free cash flow is a good gauge on just how healthy (or sturdy) a company is. Autodesk ended its Fiscal 2020 with $1.35 billion in free cash flow. This amount is more than double of 2015’s free cash flow of $633.10 million.

(Source: MacroTrends)

The strong acceptance of Autodesk’s 2015 embrace of subscription-only software marketing is largely why its free cash flow is now greater than $1 billion. Making expensive (it used to demand outright payment of $5k) AutoCAD products more affordable via easier-to-pay $210/month subscription led to better sales.

Autodesk Is Ready For The Work-From-Home Trend

The AI-assisted Fusion 360 cloud CAD/CAM/CAE product of Autodesk is perfect for quarantined employees now working from their homes. Despite competition from Onshape and other rival Cloud CAD products, Fusion 360 is still being adopted by more companies. Key to this is Fusion 360’s Generative AI design feature.

As far as I know, Fusion 360 is the only cloud-based CAD platform that lets users produce dozens/hundreds of prototypes in a matter of hours, not days. Going forward, the COVID-19 pandemic will convince more companies to adopt the work-from-home trend. Fusion 360 is ideal for telecommuting workers. It still allows them to collaborate online whether they are working from the office or from their residence.

Those who still won’t shift to Fusion 360 are also being served. Autodesk is making it easier for AutoCAD users to collaborate online and across multiple devices. The recent release of AutoCAD 2021 and AutoCAD LT 2021 last March 30 comes with better integration with Google Drive and other cloud file sharing services. The Extended Access Program for several Autodesk cloud collaboration design software products will be free to use even for commercial applications until May 31, 2020. This is Autodesk’s way of helping employees now forced to work remotely from their offices.


The big drop in stock price due to COVID-19 pandemic has made ADSK cheaper to own. We recommend averaging down with Autodesk’s stock. We are thinking of getting out of Advanced Micro Devices (AMD) and use the money to buy more ADSK. This stock’s current price of $152.32 is way below its 52-week high of $211.58. This company has little competition in the CAD/CAM/CAE software. It deserves a higher forward GAAP P/E valuation than 63.69x.

Going forward, the AEC segment will emerge stronger after this global pandemic is over. Further, the fact that video games is a pandemic-proof industry, we expect stronger revenue from Autodesk’s Maya, 3D Studio Max, Arnold, MudBox, and other Media & Entertainment software products.

Our but rating for ADSK is also congruent with its very bullish one-year market trend signal from I Know First. The AI algorithm of I Know First also strongly believes that Autodesk’s stock will most likely trade at higher price points after 12 months from now. Our fearless forecast is that ADSK will trade above $200 by April 2021.

autodesk stock forecast

Past Success With Autodesk Stock Forecast

I Know First has been bullish on ADSK’s shares in past stock forecast. On February 13, 2019, the I Know First algorithm issued a bullish forecast for Autodesk stock price for 1 year. This algorithmic trading tool successfully forecasted the movement of ADSK. After 1 year, Autodesk stock price rose by 30.07% in line with the I Know First algorithm’s forecast. See the chart below.

This bullish Autodesk stock forecast was sent to the current I Know First subscribers on February 13, 2019.

Here at I Know First our algorithm has modeled and predicted assets price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing daily market forecast, including forex forecastgold forecast, market indices predictions, and, in particular, Apple stock forecast. Additionally, we provide the latest AAPL stock news, updates and the latest launches. Today, we are producing daily forecasts for over 10,500 assets. Recently, the Corona stock market outbreak has caused significant impact onto the global economy, which is why I Know First provides latest updates and articles as Warren Buffett investment strategy. This stock market forecast generated by our algorithmic trading tool is used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market.

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