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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
Stocks Close Out Strong Month With Solid Amazon Earnings: Stock Market TodayAmazon lifted its spending forecast as its artificial intelligence (AI) initiatives create "a massive opportunity."
-
I Just Paid Off My Car. Can I Downgrade My Car Insurance Now?You've gotten rid of that car payment. Can you save even more by downgrading your car insurance? Here's what to consider.
-
Stocks Close Out Strong Month With Solid Amazon Earnings: Stock Market Today
Amazon lifted its spending forecast as its artificial intelligence (AI) initiatives create "a massive opportunity."
-
Are You Retired? Here's How to Drop the Guilt and Spend Your Nest EggTransitioning from a lifetime of diligent saving to enjoying your wealth in retirement tends to be riddled with guilt, but it doesn't have to be that way.
-
Government Shutdown Freezes National Flood Insurance Program: What Homeowners and Buyers Need to KnowFEMA's National Flood Insurance Program is unavailable for new customers, increased coverage or renewals during the government shutdown.
-
Separating the Pros From the Pretenders: This Is How to Tell if You Have a Great AdviserDo you leave meetings with your financial adviser feeling as though you've been bulldozed into decisions or you're unsure of what you're paying for?
-
What Netflix Stock's 10-for-1 Split Means for InvestorsNetflix announced its long-awaited stock split after Thursday's close. NFLX will start trading on a split-adjusted basis ahead of the November 17 open.
-
Stocks Sink with Meta, Microsoft: Stock Market TodayAlphabet was a bright light among the Magnificent 7 stocks today after the Google parent's quarterly revenue topped $100 billion for the first time.
-
Five Downsides of Dividend Investing for Retirees, From a Financial PlannerCan you rely on dividend-paying stocks for retirement income? You'd have to be extremely wealthy — and even then, the downsides could be considerable.
-
Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market TodayNvidia became the first company ever to boast a $5 trillion market cap, but it wasn't enough to lift the Dow and the S&P 500.
