NEW YORK (Reuters) - Design-software company Autodesk Inc’s shares could jump 50 percent in the next 18 months as investors get more comfortable with the company’s transition to a cloud-based business model, according to a Sunday report in Barron’s financial newspaper.
By the middle of next year, Autodesk, known for programs that help people make physical objects, will sell its last “perpetual license,” according to Barron‘s, a term for boxed software. After that, those who rely on Autodesk’s software will need to buy subscriptions for the products, all delivered via the cloud.
The move means near-term pain: shares of Autodesk have lost almost a quarter of their value in 2015, with investors grappling with the fact that the shift to the cloud will hurt earnings temporarily as the company’s revenue model shifts from one-time software purchases to smaller recurring payments.
But Barron’s notes that five years from now Autodesk could be earning over $4 a share, double its fiscal 2013 peak. The stock could benefit much sooner than that.
Autodesk spokesman Noah Cole declined to comment on the specific forecast in Barron’s but said the company planned to give new targets at its investor day on Tuesday.
Cole said the move to a cloud-based subscription model lowers upfront costs, which could help attract new customers.
Editing by Andrew Hay