With a market capitalization of $55.4 billion, Autodesk (ADSK) has become a major player in the CAD and engineering software industry. From architects to mechanical engineers, Autodesk's suite of software has influenced the way professionals design and build. Autodesk is best known for its flagship product AutoCAD, a cross-industry design software. It serves professionals in architecture, construction, engineering, manufacturing, and digital media and entertainment.
Although Autodesk shares are down 8.6% year to date, Wall Street sees huge long-term potential thanks to its subscription-based model, artificial intelligence (AI)-based innovations and strong financials, and therefore rates the company as a "strong buy". Let's find out why.
Autodesk has proven resilience
Autodesk utilizes a subscription model that ensures a steady stream of recurring revenue. Its most popular products include Revit, Fusion 360, Maya, Inventor and BIM Collaborate Pro. Despite economic fluctuations, the company has demonstrated financial stability.
In the fourth quarter of financial year 2025, total revenue increased by 12% year-on-year to USD 1.64 billion, exceeding the consensus estimate by USD 7.01 million. Adjusted earnings per share (EPS) amounted to USD 2.29, exceeding analysts' expectations and increasing by 9.6% year-on-year. Total billings increased 23% year-over-year to $2.11 billion. These figures underscore Autodesk's ability to expand despite major market challenges. Subscription revenue increased 14% and accounted for more than 92% of total revenue in the quarter, providing consistency and predictability. As more customers adopt cloud-based design solutions, Autodesk is well positioned to continue to grow its revenue. The net revenue retention rate was between 100% and 110%. In addition, the current (remaining performance obligation or RPO), which represents revenue expected over the next 12 months, was $4.46 billion.
In financial year 2025, total revenue increased by 12% to USD 6.13 billion, while adjusted earnings per share increased by 11.4% to USD 8.47 per share.
Autodesk is increasing its focus on cloud-based design and AI-powered solutions and shifting internal resources to critical areas such as industry clouds and platform development. As a result, the company announced a global restructuring plan that will result in a 9% reduction in headcount and affect approximately 1,350 employees. The company anticipates pre-tax restructuring costs of between USD 135 and 150 million.
During the fourth quarter earnings conference call, CEO Andrew Anagnost emphasized Autodesk's leadership in cloud-based design and manufacturing and highlighted notable customer partnerships such as Power Design and MSC Industrial Supply. Management also discussed the company's long-term vision to increase profitability by entering high-growth segments such as construction and infrastructure. The company generated free cash flow of USD 1.57 billion in financial year 2025 and expects to generate between USD 2.07 billion and USD 2.175 billion in financial year 2026.
Autodesk's growth trend appears to be strong as the company has raised its full-year earnings guidance. It expects revenue between $6.9 billion and $6.97 billion and adjusted earnings per share between $9.34 and $9.67. This would correspond to sales growth of 13% on average and earnings growth of around 12.2% in the 2026 financial year.
What is the price target for Autodesk shares?
The analysts remain optimistic about Autodesk and rate the company as a "strong buy".
Of the 26 analysts covering ADSK stock, 18 rate it a "Strong Buy", one rates it a "Moderate Buy" and seven rate it a "Hold". The average price target of USD 336.92 suggests that the share price could rise by 25% from its current level. In addition, the high estimate of USD 400 indicates that the share has a price potential of 50% over the next twelve months.
Long-term investors could benefit significantly as the company expands its AI capabilities, cloud solutions and presence in emerging markets. Autodesk's strong fundamentals and growth trajectory make it an attractive growth stock for long-term investors with a high risk appetite.