Autodesk Inc (ADSK)

Conclusion

Autodesk sells 3D design, engineering and construction software, including AutoCAD, Revit and Fusion. At 263.35 USD on 2026-11-09, its market capitalisation is 55.04 billion USD.

The verdict is fair. The P/E of 33.5 compares with a ten-year median of 52.0, and EV/EBITDA of 23.7 with a median of 46.2. The discounted cash flow value is 207.62 USD per share at a discount rate of 11.1%. The fair value band runs from 247.55 to 371.33 USD with a midpoint of 309.44 USD, a margin of safety of 17.5%. The reverse DCF implies growth of 13.4% a year, against revenue growth of 13.7% a year over five years and free cash flow per share growth of 13.2% a year.

The strongest numbers are a return on invested capital of 50.4% against a WACC of 10.7%, free cash flow conversion of 1.72 over the last twelve months, and net debt to EBITDA of -0.195, which means net cash. The weakest are the five-year EPS compound growth of -0.8%, a current ratio of 0.86, and a discounted cash flow value of 207.62 USD, which sits below the price. If earnings growth does not return, the premium multiples' discount to history may not close.

Financial health

Financial strength is green, held up by net debt to EBITDA of -0.195, meaning net cash, and an Altman Z-score of 4.35 in the safe zone. The current ratio of 0.86 and quick ratio of 0.73 are weaker, and debt to equity stands at 1.10. Interest coverage is not available because the company does not report its interest expense. The Altman model was designed for manufacturers, so its safe reading is only indicative for a software company. Insolvency risk: low, about 1.9% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is green, supported by free cash flow conversion of 1.72 over the last twelve months and 1.95 over five years, and a Piotroski score of 7 out of 9. The accrual ratio of -0.114 means cash generation exceeds reported earnings. Stock-based compensation is 9.1% of revenue, and free cash flow after it is 2.13 billion USD. The share count fell at a compound rate of 0.65% a year over five years, which points to buybacks. The Beneish M-score of -2.63 gives an unlikely reading for manipulation. The company beat earnings estimates in all eight of the last quarters, by 9.97% on average. Estimate revisions are mixed: for the next year, 16 estimates rose and 18 fell over the last thirty days.

Profitability

Profitability is green. The operating margin of 27.6% compares with a ten-year median of 15.3%, and the net margin of 21.1% with a median of 13.5%. The gross margin of 91.3% is close to its median of 90.4%. Return on invested capital is 50.4% against a WACC of 10.7%, a given gap of 39.7%, and the five-year median return on invested capital is 35.6%. Return on equity of 48.5% is inflated by leverage: the DuPont split shows a net margin of 15.6%, asset turnover of 0.578 and an equity multiplier of 4.09, from the January 2026 statements.

Growth

Growth is yellow, because revenue growth is solid but earnings per share have shrunk over five years. Revenue compounds at 12.9% over three years, 13.7% over five and 11.2% over ten, and it grew in nine of the last ten comparable years. Earnings per share compound at 11.5% over three years but at -0.8% over five. Free cash flow per share compounds at 6.5% over three years, 13.2% over five and 22.2% over ten. The next-year earnings estimate implies growth of 12.6%.

Valuation

Valuation is yellow, with a neutral reading. Current multiples sit below their ten-year medians: P/E 33.5 against 52.0, a premium of -35.6%; EV/EBITDA 23.7 against 46.2, -48.8%; price to free cash flow 19.4 against 36.8, -47.1%; price to sales 7.07 against 9.38, -24.7%; price to book 16.3 against 25.4, -36.0%. The discounted cash flow value is 207.62 USD per share at a discount rate of 11.1%, and 50.5% of it comes from the terminal value. The fair value from historical multiples is 411.26 USD. The fair value band is an order of magnitude built on fixed assumptions, not a price target. The reverse DCF implies 13.4% growth. The free cash flow yield is 5.2%. The company pays no dividend.

Risks

The weakest numbers would hurt in specific ways. A current ratio of 0.86 leaves little short-term cushion if cash flow slows. Five-year EPS shrinkage of -0.8% means the earnings base has not kept pace with revenue, so a fall in margins would weigh heavily on the case. The downward revisions to next-year estimates, 18 against 16 upward, suggest analysts are cautious. Interest coverage and the interest expense are not available, and cost of debt of 6.9% is assumed rather than reported. This analysis has no debt maturity schedule and no revenue by segment, so refinancing risk and the mix of growth cannot be tested.