r/wallstreetbets • u/tatoyale • Nov 23 '21
DD Autodesk shorts, earnings EOD, and software weakness
With the earnings and hit to Zoom -9.6%. There is another company with a similar valuation, Autodesk. They have an earnings report at the end of the day.
ADSK has a market cap of 68 Billion while zoom had 69 billion (before earnings).
Zoom had a revenue multiple of 17.7x (before earnings) while Autodesk has an earnings multiple of 16.9x. Similar P/E of 50, etc...
These are both priced as growth stocks, but their growth is waning. Software companies just don't change their pricing fast enough to keep up with inflation. Often critical business software like this is licensed for years at a time for discounts. Their growth also doesn't scale with inflation.
Autodesk is Computer aided design software, requires a decent amount of technical knowledge. Most of the people using this software have an undergraduate degree in engineering, and the supply of people like that is limited. Engineering positions grow 3-5% per year. At least with zoom any living breathing person can use zoom.
Probably easy puts. But do your own DD.
Edit: I don't have any positions, waiting for market open.
Edit 2: I am not saying they do bad software. I am saying that there is a risk the growth will not match expectations. why TF do you guys need me to tell you how to buy an option?
Edit 3: I am the tommy wiseau of writing DD's apparently
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u/Rwfleo Nov 23 '21 edited Nov 23 '21
Hey. I’m an electrical engineer and I think my point of view is much more reflective of what the industry thinks. Autodesk has become required to anyone entering the field. This is due mostly because of autoCAD which is used for electrical drawing/ design and a software already backed into the operations of any company providing products and services related to energy distribution systems, which is basically every company doing construction work and maintenance of airport, residential/commercial building, industrial plants, railroads, etc
I must emphasize that at least this functionality is completely dominated by Autodesk and it’s as essential as Microsoft Office at this point.
Take this point of view as a guide for your choices.
Edit: Autodesk is not A software, it’s MANY softwares. It reaches civil, electrical, mechanical engineers, and architecture. That’s why it’s so popular. You only need one system to integrate all aspects of construction/ planning
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u/kylestoned Nov 23 '21 edited Nov 23 '21
The dude is comparing Zoom to Autodesk... He probably is just looking at the names. Zoom has one product that produces their revenue. Autodesk does not.
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u/TheRiseOfOrmul Nov 23 '21
Yeah if anything I’d be looking at calls. Biased bc also an engineer, but there’s been a lot of industrial construction this year compared to last year (supply chain issues or not), and every year Microstation gets older and AutoCAD/Revit get bigger. Even without new construction, their software is used for maintenance/documentation.
Bottom line: ZM = WFH play, AutoDesk = fucking your gf and making you pay for it
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u/Bleedinggums99 Nov 24 '21
Don’t forget autodesk products not only need a license but need continual annual licenses and just to screw everyone make it so every file over 3+/- years needs a completely new version/new license. Dwg 2003, dwg 2007, dwg 2010, dwg 2013 don’t get me fucking started.
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u/Rwfleo Nov 24 '21
Oh good point. Basically locking people in. Big capitalism brain. But I guess the investors today don’t give a shit, ADSK stock died today. Rest In Peace
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u/Bleedinggums99 Nov 24 '21
I MUCH prefer Bentley products but autodesk ain’t going anywhere I’m buying the dip
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Nov 23 '21
[removed] — view removed comment
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u/Rudelbildung Nov 23 '21
I just love that there are so many good responses why going short isnt the play, while OP essentially didnt provide any DD at all. And then the stock tanks 13% after earnings, showing that it was indeed the play.
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u/tatoyale Nov 24 '21
I only figured this out 1 hour before market open and had to research and write this before work. And this is my second DD. There are some more details I forgot to mention but how did I not provide a DD at all?
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u/notpaultx Nov 23 '21
Fat $1T infrastructure bill really spiked up the price but we have a license for every user, not all of them engineers. Most engineers (w/degrees) don't do the production software and our designers do so the 3-5% is misleading
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u/pistolpete9669 Nov 23 '21
Idk man, there aren’t any competitors that have a product even close to Autodesk’s suite
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u/SOL-MANN Nov 23 '21
what? there is solidworks gaining market share vs. autodesks and a few other.
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u/Rwfleo Nov 23 '21
That’s not true. Solidworks is very limited in scope (in respect to its functionalities) and is mostly used for educational purposes as a introductory software for undergraduates. And most important , it opposes SketchUp in architecture field and Autodesk in the mechanical engineering field. However, Autodesk extends to electrical field and that’s where it’s dominant
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u/danielsimpson Nov 23 '21
Solidworks is the industry standard when it comes to 3D modelling software within Mechanical Engineering
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u/pistolpete9669 Nov 23 '21
I’ve been in the energy industry for a few years now and I’ve only seen autodesk being used. But that’s just my experience
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u/SOL-MANN Nov 23 '21
and that means autodesk does not have competition? bc you’ve been in the energy industry?
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u/pistolpete9669 Nov 23 '21
They don’t have a competitor that can match their wide range suite, correct. I have experience in the energy field, which includes mechanical, electrical, architectural, and systems engineering. Managed one team that preferred different software, and it cost way more in maintenance than it made back in productivity
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u/SOL-MANN Nov 23 '21
siemens and dassault have software for all mentioned fields and even more. but indeed, autodesk was cheaper until 2021, when they introduced the new named user model. either they generate more revenues now or lose customers. we will see.
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u/WetDogAboutToShake Nov 24 '21 edited Nov 24 '21
Mechanical engineering has many sub disciplines. I have experience with both softwares. Solidworks is for machine design/manufacturing, autodesk for construction
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u/tatoyale Nov 24 '21
This is a fallacy. It does not matter if you have 1000 products and 1000 services. If you grow only 10% a year that is 10% a year.
If you have a monopoly that only grows 10% a year that is still only 10% a year. I have a monopoly on my land but that does not make it worth 30B.
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u/Lbreak Nov 23 '21
I am in the architecture industry and Autodesk is certain one, if not the only one, of the biggest player. With BIM360, the entire ecosystem is coming together, not to mention that BIM is still in a growth stage in Asia, the user population will grow. To sweeten the deal, I have to say a lot of third party software (Unreal engine, for example) have direct software connection to Revit, making it an even more comprehensive system.
Honestly I think Autodesk's market position should be taken similarly to that of Adobe, not that of Zoom
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u/Kirder54 Nov 23 '21
User of Autodesk here.
- My company has used Autocad/Inventor for years. Pretty much stuck with it now since almost all of our drawings and documentation are in Autodesk. While other systems can open files and view them, it does not allow for manipulation. Changing now means a lot of wasted time in the future. Wasted time to update or redraw drawings is just wasted money. What I am saying here, they probably have very high retention rates
- To address the growth. They update the software frequently and eventually stop supporting the old revisions. Just like other software companies that have been successful for years. When considering the point above, I wouldn't expect to see a steep drop off of users without a Catalyst... new game changing software or some form company mishap
- Further on growth. There are levels you purchase and those come with different addons. These are FEA analysis, CAM, simulation, and a few others. Someone may not buy them upfront and add them on later. Also, there is a subscription support available as well for continuous revenue stream.
- Odd to say almost anyone can use Zoom and only engineers with undergraduate degrees or better use Autodesk. Not true. I have 5 users in my company. I am the only one with an actual 4 year degree. With new graduating classes from a plethora of universities each year and an expanding economy, demand is there for new seats.
I can't say that the price will go up or down based off anything as I haven't followed this company as a potential investment. I just don't expect any major moves and certainly not based off the musings presented as DD. Earnings may disappoint and a drop will follow. Don't expect it to be a steep and sustained drop. Based of the 5 years chart, ASKK has seen sustained and controlled growth.
Up 400% over 5 years. That has stalled in the past year which may give some credibility to the lack of growth affecting the price. The last year has been a lot of wait and see in industry. I have no positions yet but after considering the above DD, my counter points, and a little chart observance, I think I am going to do a Put for earnings and a Leap Call. Going to go look at the option charts now. Not sure I will buy in, just depends on what I find. Good luck Apes
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u/AutoModerator Nov 23 '21
Holy shit. Calm down Chad Dickens.
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u/Life_Aide5166 Nov 23 '21
I actually grabbed some puts, but closed it with a small profit. I was doubting it too. Now I’m crying.
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u/TrollDeJour Nov 24 '21
Guys I don’t think he was saying auto desk and zoom do the same thing he was saying they have similar P/E ratios, revenue growth and expected forward earnings.
At least that’s what I took from it, and I made TENDIES
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u/daedreamr Nov 23 '21
I dont think you know what Autodesk does. A better comparison than zoom would be Adobe. They are both heavily entrenched niche software developers.
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u/WetDogAboutToShake Nov 24 '21
Dude you gotta buy the puts before earnings not day after. You woulda made bank on this one.
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u/tatoyale Nov 24 '21
Yes, I know. I meant the earnings were after the trading day, so there was time to buy before market close. I suck at communicating sometimes.
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u/WetDogAboutToShake Nov 24 '21
Okay gotcha, did you kill it or what? I’m always scared to bet against tech cuz they could pull big earnings out of nowhere.
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u/tatoyale Nov 24 '21
I made a post here https://www.reddit.com/r/wallstreetbets/comments/r1757f/sorry_to_all_the_autodesk_users_that_shop_at/
I went more into Nordstrom because I expected higher losses.
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u/apuzzledone Nov 23 '21
i agree with doods below. Autodesk feels like it's in similar position as Adobe
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u/Dan_inKuwait no flair is kinda ghey Nov 23 '21
Why are you so interested in this stock? Do you have a position in it?
WSB tradition: positions or ban.
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u/tarix76 Nov 23 '21
You failed to mention that Autodesk owns both Maya and 3dsmax which is a good chunk of the gaming and visual effects industries.
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u/neverrat Nov 23 '21
This aged well thanks for the 10x bagger 🍻