2191

Winners And Losers Of Q1: Autodesk (NASDAQ:ADSK) Vs The Rest Of The Design Software Stocks


Kayode Omotosho /
2024/06/18 6:08 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Autodesk (NASDAQ:ADSK) and its peers.

The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.

The 7 design software stocks we track reported a weak Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 3.2% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and design software stocks have held roughly steady amidst all this, with share prices up 0.4% on average since the previous earnings results.

Autodesk (NASDAQ:ADSK)

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Autodesk reported revenues of $1.42 billion, up 11.7% year on year, topping analysts' expectations by 1.3%. It was a weaker quarter for the company, with a miss of analysts' billings estimates.

"Autodesk is ahead of its peers in 3D AI and the industry clouds, platforms, and business model evolution that will be needed to deliver 3D AI products and services at scale. We can already use generative AI to quickly generate functional 3D shapes from a variety of inputs including 2D images, text, voxels and point clouds. We are well on the way to reasoning about all CAD geometry," said Andrew Anagnost, Autodesk president and CEO.

Autodesk Total Revenue

The stock is up 14.5% since the results and currently trades at $242.27.

Is now the time to buy Autodesk? Access our full analysis of the earnings results here, it's free.

Best Q1: Unity (NYSE:U)

Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.

Unity reported revenues of $460.4 million, down 8% year on year, outperforming analysts' expectations by 6.2%. It was a solid quarter for the company, with a significant improvement in its gross margin and a narrow beat of analysts' billings estimates 

Unity Total Revenue

Unity pulled off the biggest analyst estimates beat among its peers. The stock is down 32.1% since the results and currently trades at $16.42.

Is now the time to buy Unity? Access our full analysis of the earnings results here, it's free.

Weakest Q1: ANSYS (NASDAQ:ANSS)

Used to help design the Mars Rover, Ansys (NASDAQ:ANSS) offers a software-as-a-service platform that enables simulation for engineering and design.

ANSYS reported revenues of $466.6 million, down 8.4% year on year, falling short of analysts' expectations by 15.9%. It was a weak quarter for the company, with a decline in its gross margin and a miss of analysts' average contract value estimates.

ANSYS had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is up 1.9% since the results and currently trades at $327.23.

Read our full analysis of ANSYS's results here.

Cadence (NASDAQ:CDNS)

With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design.

Cadence reported revenues of $1.01 billion, down 1.2% year on year, falling short of analysts' expectations by 0.9%. It was a weak quarter for the company, with a miss of analysts' billings estimates and a decline in its gross margin.

The stock is up 13.4% since the results and currently trades at $323.5.

Read our full, actionable report on Cadence here, it's free.

Adobe (NASDAQ:ADBE)

One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.

Adobe reported revenues of $5.31 billion, up 10.2% year on year, in line with analysts' expectations. It was a strong quarter for the company: Adobe beat analysts' revenue, RPO, and EPS expectations. These beats were driven by massive outperformance in its net new Digital Media ARR, which clocked in at $487 million (vs estimates of $434 million).

The stock is up 11.8% since the results and currently trades at $513.

Read our full, actionable report on Adobe here, it's free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.