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Autodesk (ADSK) To Acquire Cloud PLM Service Provider, Upchain

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Autodesk ADSK recently inked a definitive agreement to acquire Upchain, a Toronto-based provider of cloud-based product lifecycle management (“PLM”) and product data management (“PDM”) software.

Upchain has created a unified cloud platform that pushes the boundaries of traditional PLM and PDM technologies. The company helps manufacturers manage complexity between teams by putting data at the heart of the product development process.

Additionally, it has customers in aerospace, transportation, machining and apparel, which complements Autodesk in the types of industries the two companies’ support.

The integration of Autodesk’s existing apps with Upchain’s PLM and PDM, will naturally fit with the existing customer base and support other CAD systems commonly used in the manufacturing industry.

Autodesk, Inc. Price and Consensus

Autodesk, Inc. Price and Consensus
Autodesk, Inc. Price and Consensus

Autodesk, Inc. price-consensus-chart | Autodesk, Inc. Quote

Strategic Investments & Acquisition: Key Catalysts

Autodesk is benefitting from regular investments in businesses, software solutions, and technologies that are complementary to the company’s business through acquisitions, strategic alliances, or equity or debt investments, including the acquisitions of Innovyze and CAMplete.

Earlier this year, Autodesk acquired water infrastructure software provider Innovyze — a global leader in water infrastructure software — for $1 billion. The acquisition positions Autodesk as a technology leader in end-to-end water infrastructure solutions.

In November 2020, the company acquired Spacemaker AS, which has strengthened and enabled Autodesk’s early-stage design and outcome-based design capabilities.

Solid Demand Autodesk Construction Cloud Aid Top-Line Growth

Autodesk Construction Cloud has been gaining traction with owners, general contractors and subcontractors across the construction industry, which is expected to have aided top-line growth in the soon-to-be-reported quarter.

On Dec 16, Autodesk announced that more than 4,000 specialty contractors across all industry segments — from mechanical to earthwork, HVAC, concrete, interior buildouts and more — chose Autodesk Construction Cloud technology for their projects.

In fourth-quarter fiscal 2021, Autodesk announced a new set of products — Autodesk Build, Autodesk Quantify and Autodesk BIM Collaborate — for Autodesk Construction Cloud that further connect data, workflows and teams throughout the entire building lifecycle, from design to operations.

Moreover, Autodesk’s investment in Aurigo Software is likely to have helped it fortify its construction business, in turn, bolstering the top line. Aurigo’s integration with Autodesk Construction Cloud, a powerful portfolio of construction management software and services, gives owners a single end-to-end technology platform for design, planning, construction and operations of infrastructure as well as private assets.

Meanwhile, the international expansion of BuildingConnected, a construction management solution that centralizes and streamlines the bidding process as well as encompasses the Autodesk Construction Cloud builders network, is expected to drive top-line growth in the near term.

With this international expansion, the BuildingConnected solution is now available in the United Kingdom, Ireland, Australia and New Zealand.

However, the top line is expected to reflect the impact of sluggish growth in Maintenance revenues due to the continued migration of maintenance plan subscriptions to subscription plan.

Zacks Rank & Stocks to Consider

Autodesk currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector are Adobe Inc. ADBE, Cadence Design Systems CDNS, Microsoft Corporation MSFT, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Adobe, Cadence Design Systems and Microsoft is currently pegged at 18.3%, 11.1% and 12.6%, respectively.

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