Autodesk (ADSK) stock jumped more than 4% at the start of trading Monday after a report in The Wall Street Journal indicated activist investor Starboard Value has built an estimated $500 million stake in the global software firm.
Starboard's concerns are centered around Autodesk's operations, corporate governance and how the company handled a recent accounting probe, the WSJ said, citing people familiar with the matter. Starboard thinks Autodesk should improve its margins and make changes to its board of directors and it recently met with ADSK management to discuss these issues.
As part of its activist investing push, Starboard is also weighing legal action to reopen Autodesk's director-nomination window and to delay the company's annual shareholder meeting, which is currently scheduled for July 16, The Wall Street Journal report indicated.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"We are confident in our strategic direction, significant margin opportunity, and our corporate governance," an Autodesk spokesperson said, according to the WSJ, adding that it welcomes constructive feedback from shareholders.
Autodesk stock has a market cap of about $51 billion at the time of this writing, so Starboard’s estimated $500 million stake would be roughly 1% of the company. While it's a large amount of money, it still does not make Starboard a top 10 stakeholder in Autodesk. Currently, The Vanguard Group and BlackRock are the largest stakeholders, owning roughly 9% and 8.5% of the company, respectively.
Is Autodesk stock a buy, sell or hold?
Even though the tech stock has drastically underperformed the broad market this year, down 2.6% for the year to date vs the S&P 500's nearly 14% gain, analysts are bullish.
According to S&P Global Market Intelligence, the average analyst target price for ADSK stock is $270.20, representing implied upside of more than 14% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Oppenheimer is one of the bullish outfits on ADSK stock with an Outperform rating (equivalent to a Buy) and a $275 price target.
"We expect Autodesk to deliver durable high-teens to low-20% earnings growth powered by double-digit revenue growth, and consistent margin expansion in the mid to long term," Oppenheimer analyst Ken Wong wrote in a June 12 note. "We also believe Autodesk is well positioned to capitalize on the digitization of the construction market, which remains a significantly large ($12 billion total addressable market) analog end-market."
Oppenheimer's $275 price target represents implied upside of over 16% to current levels.
Related Content
-
How to Invest in SportsIf it's springtime, Forbes is out with its annual list of baseball franchise values. The billions involved might make you wonder how to invest in sports.
-
What’s Happening With Trump’s Tariffs? Key Updates for April 2025Tariffs Donald Trump continues to use tariffs as a central tool of his trade policy. Here’s where tariffs stand now.
-
How to Invest in SportsIf it's springtime, Forbes is out with its annual list of baseball franchise values. The billions involved might make you wonder how to invest in sports.
-
Winning Strategies for Financial Advisers as Clients' Lives EvolveHow can the wealth management industry help make life transitions easier for the adviser and the client?
-
How Advisers Can Establish Relationships With HNW ProspectsThese strategies can help to build influence with high-net-worth individuals, who are often looking to an adviser for insight rather than solutions.
-
When Your Car Is Fixed, But You've Still Got the ProblemThis reader's experience with trying to get squealing brakes fixed under an extended warranty mirrors what others are experiencing these days.
-
Stock Market Today: Dow Rises 854 Points From Its Intraday LowIf there's one thing markets hate, it's uncertainty. But uncertainty is all they're getting these days.
-
Seven Questions to Ask When Evaluating Personal Loan OptionsTaking out a personal loan too hastily could lock you into unfavorable terms with an untrustworthy lender. Ask these questions before signing anything.
-
How Much Does Being Rich Matter in Retirement?After a certain point, having more money in retirement won't make you any happier, new research shows. Instead, physical health, a sense of purpose, and a minimal amount of non-mortgage debt are more relevant.
-
The Three Biggest Fears Keeping Retirees Up at NightHere are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
