Bullish stock to watch: Autodesk, Inc. (NASDAQ: ADSK)

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Autodesk, Inc. (NASDAQ: ADSK) stock rose over 3.9% on 27th November, 2019 (as of 11:07 am GMT-5; Source: Google finance) after the company posted better than expected results for the third quarter of FY 20. The company has reported a profit of $66.7 million, or 30 cents a share, from a loss of $23.7 million, or 11 cents a share, a year earlier. Geographically, the company has delivered broad-based strength across all regions as the toline grew 30% in Americas and APAC, while EMEA grew by 24%. Billings rose 55% to more than $1 billion. This growth came on the back of organic business, contributions from construction, annual return of multi-year contracts closer to historical levels. Further, Remaining performance obligations or RPO, which is the sum of billed and unbilled deferred revenues grew 32% and 6% sequentially to about $3 billion. Current RPO, which represents the future revenues under contract, anticipated to be recognized over the year was of $2.1 billion, which is an increase of 23%. ADSK has generated the free cash flow of $267 million in Q3.

ADSK in the third quarter of FY 20 has reported the adjusted earnings per share of 78 cents, beating the analysts’ estimates for the adjusted earnings per share of 72 cents, according to analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 28 percent to $842.7 million in the third quarter of FY 20, beating the analysts’ estimates for revenue of $825.7 million. Non-GAAP gross margins were very strong at 93%, which is slightly up quarter-over-quarter and up 2 percentage points compared to last year. The company’s non-GAAP operating margin had expanded by 13 percentage points to 27%.

Additionally, during the third quarter, the company had repurchased 856,000 shares for $124 million at an average price of $144.49 per share. Year-to-date, the company had repurchased 1.7 million shares for $264 million at an average price of $156.16 per share. The company has also paid down another $100 million on the term loan associated with the fourth quarter of fiscal 2019 acquisitions, and plans to repay the remaining $150 million by the end of fiscal ’20.

Autodesk now expects earnings per share to be in the range of $2.74 to $2.79 a share on an adjusted basis for the whole year, on the range of $3.41 billion to $3.45 billion in revenue. It previously was expecting $2.69 to $2.81 a share as adjusted, and $3.24 billion to $3.27 billion in revenue.

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