Seasoned software developer Autodesk Inc. (ADSK) has kept its hat in the ring in the construction and engineering software market making several recent acquisitions, and turning a strong profit during Q1FY21. Autodesk has seen robust growth after its transition to a subscription-based service, and retention has improved. (See Autodesk stock analysis on TipRanks)

Following the earnings release, Kenneth Wong of Guggenheim Partners assigned a Hold rating to the stock but did not delineate a price target. In a note to investors, Wong stated that he was cautiously optimistic about the company, noting that usage trends in all regions except for the U.S. have returned to pre-COVID-19 levels, construction projects are returning, and ADSK is seeing a full pipeline of business to take care of.

The analyst also referred to the potential upsides to Autodesk’s recent key-factor acquisitions, such as Innovyze and Upchain, stating that they will allow the company to excel with water infrastructure software solutions, and even compete with rival PTC in cloud-based data management markets.

Wong mentioned that he was not including a price target until the “sustainability of the company’s recent strong financial performance, Marco exposure, and acquisition of PlanGrid” are evaluated.

He also was mindful of potential risks to the company, such as an uneven execution of its subscription transition, or the possibility that the construction market for software “continues to stagnate.”

On TipRanks, Autodesk is a Strong Buy based on 9 Buy and 2 Hold ratings. The stock has an average analyst price target of $337.60, reflecting upside potential of 18.10% over the next 12 months.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.