The developments at engineering design software company Autodesk (NASDAQ: ADSK) somehow represent many difficulties that growth investors face in 2022. On the one hand, the stock has fallen significantly. On the other, its near-term growth prospects are at risk, which creates some doubt around the company's guidance. So what to make of it all? Is the stock now a great value opportunity or a value trap?
It's been a challenging year for Autodesk investors. Around the spring of 2021, hopes were high that the booing economy would lead to the company easily meeting its fiscal 2022 and fiscal 2023 guidance. To avoid confusion, I should add that Autodesk finishes its fiscal year on Jan. 31, so its recently reported fourth-quarter results are for the full-year 2022.
I will focus on its free cash flow (FCF) guidance in this article for reference. Autodesk started its fiscal 2022 forecasting $1.575 billion to $1.65 billion in FCF for 2022, rising to $2.4 billion in fiscal 2023. As noted last year, these targets always looked aggressive , as they imply a big jump in FCF between 2022 and 2023 with very high FCF margins.
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Market Sell-Off: Time to Buy Autodesk?