Autodesk Inc. (ADSK) has more to offer to its AutoCAD users as it is about to add new and enhanced 3D features in the next version of AutoCAD WS. It does not end at that, as the users also get to enjoy features such as global positioning system (GPS) and Plot-to-Print facility in the latest AutoCAD WS.
AutoCAD WS is a cloud-based CAD editor that is available as a mobile app for Apple Inc.’s (AAPL) iOS and Google Inc.’s (GOOG) Android and as a web app version that is accessible through any browser. The popularity of the AutoCAD WS among professional architects, designers and engineers and non-CAD professionals can be gauged by the number of downloads that has reached more than three million to date.
The feature that is warranted to popularize the AutoCAD WS is the 3D mode, which will allow users to view and share 3D drawings in their mobile devices. Moreover, the GPS capabilities will store the geographic location within the drawing.
Additionally, the users can easily access and print their designs on any web-connected Hewlett-Packard Co.’s (HPQ) HP Designjet printer, directly through the AutoCAD WS application. The new feature, with the support of the cloud application, plays a key-role in the design segment as it allows professionals to print, or, document and share their designs irrespective of their location.
In our view, the company’s improvements and innovations in 3D design technology and product portfolio provides a competitive edge. Moreover, Autodesk’s expanding product portfolio and broadening industry and geographic reach will help it sustain its longer-term growth strategy of providing high-volume, lower-cost CAD software. We believe this will likely drive earnings going forward.
Moreover, the recent acquisitions (GRIP Entertainment, Micro Application Packages Ltd. and Koblenz, Germany-based Numenus GmbH ) in the CAD and gaming middleware sections will provide the company with long-term opportunities, particularly in the web-based communities that will likely boost the company’s cloud offerings going forward.
However, foreign exchange fluctuations, increasing exposure to Europe, and competition from Adobe Systems Inc. (ADBE) and Parametric Technology Corp. (PMTC) are the headwinds. Additionally, there is a risk of customer concentration as an estimated 30% of the Autodesk’s business comes from 1% of its customers.
We have a Neutral recommendation on Autodesk’s shares in the long term. Currently, Autodesk has a Zacks #3 Rank, which translates into a short-term (1-3 months) ‘Hold’ rating.
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