Autodesk (ADSK) Stock Trades Up, Here Is Why

What Happened:

Shares of design software company Autodesk (NASDAQ:ADSK) jumped 6.6% in the morning session after the company reported a "beat and raise" quarter. Autodesk beat on revenue and adjusted operating income. Management noted that demand has been resilient despite macro volatility, including the recent Hollywood strikes impacting industry growth. Looking ahead, guidance was strong, with the company raising full year revenue guidance. Full year EPS guidance was also above expectations. Overall, this was a strong quarter. After the initial pop the shares cooled down to $262.42, up 1.7% from previous close.

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What is the market telling us:

Autodesk’s shares are very volatile and over the last year have had 5 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 5 months ago, when the stock dropped 7.8% on the news that the company provided an update on an ongoing internal investigation, which will delay filing its annual report for the year ended January 31, 2024 within the grace period provided by the SEC (Securities and Exchange Commission). In a report filed with the SEC on April 1, 2024, the company revealed it was working with outside counsel and advisers regarding its free cash flow and non-GAAP operating margin practices. The market hates uncertainty, and this update is likely to raise concerns about the business.

Autodesk is up 12.1% since the beginning of the year, and at $262.42 per share it is trading close to its 52-week high of $266.68 from February 2024. Investors who bought $1,000 worth of Autodesk’s shares 5 years ago would now be looking at an investment worth $1,837.

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