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Is it Time to Buy Autodesk, Inc.? (NASDAQ:ADSK)
Autodesk, Inc. (NASDAQ:ADSK) will report their December 2014 quarter earnings on February 26 and analysts are tipping for the company to report earnings at 13 cents per share. Many whispers on the Sreet are preditcing that the earnings will come in lower than estimates. As ADSK in our analysis below appeaers overpriced from both a value and growth perspective, we can expect to see the stock fall dramatically should there be a severe earnings miss. Investors risk averse should be wary of this potential. [Trend Analysis]
Autodesk, Inc. (NASDAQ:ADSK) last traded at $62.07 after moving up 0.19% for the trading day.
ADSK is trading with a trailing 12 month P/E multiple of 114.94 and an estimated forward P/E multiple of 47.17. The stock has an estimated 5 year annual growth of 7.70% and a PEG multiple of 14.93.
From a value investor perspective, as mentioned Autodesk, Inc. trades on an estimated forward P/E multiple of 47.17. The current estimated forward P/E ratio for the market as a whole is approximately 19.82. Therefore, for value investors ADSK appears to be overpriced.
For growth investors, who are more interested in growth into the longer term for the stock, we look at the PEG multiple (P/E to growth) of Autodesk, Inc. (NASDAQ:ADSK). This PEG multiple takes into account the expected long term growth in earnings of Autodesk, Inc. rather than merely the growth for one full earnings period ahead.
As a rule of thumb, growth investors often believe a stock with a PEG of between 0 and 1 is considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of ADSK being 14.93, we consider Autodesk, Inc. to likely be overpriced.
The mean analyst 12 month target price for Autodesk, Inc. (NASDAQ:ADSK) is currently $68.56 or 10.46% above the current price. Additionally, the stock has been as high as $63.00 and as low as $44.76 in the last 52 weeks. Analysts are estimating that ADSK will report earnings per share of $0.32 next quarter.