Autodesk Stock Ready to Rip? Q3 May Be the Turning Point

Autodesk (NASDAQ: ADSK) can hit new highs in Q3 due to its cloud shift, AI adoption, and strong financial performance. The company persistently outperforms its consensus figures and provides favorable guidance, a recipe for positive sentiment trends that drive market action. 

In this case, the trends include steady analyst coverage with a relatively high number, 23, covering he stock, firming sentiment and a rising price target. The sentiment is pegged at Moderate Buy in early Q3, with revisions leading to the Strong Buy range and a significant price increase for the stock. The consensus in early July is for an 8% gain, sufficient for a new all-time high, with the most recent revisions leading to the high-end range, another 10% upside when reached. 

The long-term outlook for Autodesk is robust and aligns with the outlook for higher share prices. The company is forecasted to grow revenue at a slowing pace but to sustain a modest double-digit CAGR through the middle of the next decade. The top-line growth pace will be exceeded by earnings growth, and both the top- and bottom-line forecasts are likely to be light.

Autodesk has outperformed its consensus more than 90% of the time and showed signs of accelerating in the latest report. Revenue grew by 15% compared to only 11% in the prior quarter and year, underpinned by client wins and penetration gains. 

Autodesk Moves to Critical Resistance Point

Autodesk’s price action is at a critical resistance and potential pivot point in early Q2 2025. The market for this tech stock has moved up to retest resistance, aligning with the highs set in 2021, just below the all-time high, and may soon move above them. A move to fresh highs would signal a crucial market shift and open the door to a more sustainable rally.

The market may experience turbulence at its all-time high in this scenario, but it is unlikely to correct significantly.  

Autodesk’s Strong Q1 Sets It Up for a Strong Year

Autodesk had a strong Q1, setting it up for a strong year. The critical detail is that strength in all segments, product lines, and geographies reflects little to no impact from macroeconomic headwinds. The takeaway is that the consensus outlook for F2026, robust as it is, likely underestimates the company’s performance by a wide margin.

As it stands, the consensus is for Q2 revenue to grow by only 14%, compared to the 15% gain in Q1; however, revisions are leading to a high-end range and may continue to boost the consensus until the results are released in late August. 

The balance sheet highlights at the end of Q1 didn’t reflect improvement so much as stability and strength. The cash position was up, but reduced receivables offset that. Current and total assets and liabilities were flat, leaving equity flat compared to last year. 

Leverage is low, with long-term net debt less than 1x equity, and cash flow allows for modest share repurchases. Repurchases reduced the count by roughly 0.5% year over year in F2025 and matched the pace in FQ1 2026, providing some leverage for shareholders.

The most significant risk for investors is insider selling. Executives have been selling all year, but the headwind they present is minimal; they own only 0.15% of the stock, while institutions pose a bigger threat. Institutions, which own about 90% of the stock, bought on balance in the first half of the year but began selling in Q2.

The mitigating factor is that the initial reports for Q3 show significant buying activity in the quarter’s first week, suggesting a tailwind for price action that can help lift the stock price in the back half of 2025. 

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The article "Autodesk Stock Ready to Rip? Q3 May Be the Turning Point" first appeared on MarketBeat.