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Autodesk (ADSK) Q3 Earnings: Is a Surprise in the Cards?


Autodesk, Inc. ADSK is set to report third-quarter fiscal 2017 results on Nov 29. In the last quarter, the company delivered a positive earnings surprise of 66.67%. The company has delivered an average positive earnings surprise of 52.38% in the trailing four quarters.

Let’s see how things are shaping up for this announcement.

Factors to Consider

With Autodesk’s business transition from licenses to cloud-based services complete, its subscriptions and deferred revenues will get a boost going ahead. Also, the company remains focused on undertaking more cost-cutting initiatives as a part of its business transition.

Autodesk’s aggressive acquisition strategy has played a pivotal part in developing its business over the last couple of years. Plus, Autodesk also expanded its share repurchase program in its efforts to maximize shareholder value.

However, in the near term, the company’s financials may also be affected by increasing investments in cloud-based infrastructure and marketing initiatives. Foreign exchange fluctuations and competition in the cloud-computing domain from the likes of Amazon.com Inc. AMZN, Microsoft Corp. MSFT and Adobe Systems also remain headwinds.

For the third quarter of fiscal 2017, Autodesk expects revenues in the range of $470 million – $485 million. Non-GAAP loss per share (excluding stock-based compensation expense and amortization of acquisition-related intangibles) is expected in the range of 22 cents – 27 cents for the quarter.

Earnings Whispers

Our proven model does not conclusively show that Autodesk is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Autodesk’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 41 cents.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Autodesk has a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

AUTODESK INC Price and EPS Surprise

AUTODESK INC Price and EPS Surprise | AUTODESK INC Quote

Stock to Consider

Here is a company, which you may consider as our model shows that it has the right combination of elements to post an earnings beat this quarter:

PVH Corp PVH with an Earnings ESP of +0.42% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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