10 Cheap Robotics Stocks To Buy

3. Autodesk, Inc. (NASDAQ:ADSK)

Number of Hedge Fund Holders In Q1 2024: 52

Price Upside: 10%

Average Share Price Target: $271.57

Autodesk, Inc. (NASDAQ:ADSK) is one of the biggest software companies in the world. It provides design software that allows robot manufacturers and other firms to make their products. Some Autodesk, Inc. (NASDAQ:ADSK) products that cater to robotics include its Autodesk 365 software and Cobot software which allows humans and machines to work together in a manufacturing environment. Autodesk, Inc. (NASDAQ:ADSK)’s dominant role in the design software industry means that instead of growing its customer base, it has to retain customers by continuously upgrading its products to suit their needs. It also allows the firm to benefit from stable recurring revenue, as signing new customers allows Autodesk, Inc. (NASDAQ:ADSK) to earn subscription revenue as well. However, its significant exposure to the industrial sector means that Autodesk, Inc. (NASDAQ:ADSK) can only fire on full cylinders if rates are low and industrial spending is high.

However, there has been some turbulence for the firm recently as outlined by Polen Capital in its Q2 2024 investor letter:

“With Autodesk, most of the stock’s price weakness came in April. The company announced that it would delay the release of its earnings and 10-K filing as it launches an internal investigation regarding its practices on some non-GAAP financial metrics. Upon further analysis, we were encouraged to hear that they were taking this very seriously and being very comprehensive in their investigation. Ultimately, [it] announced it was closing the investigation and that no re-statements would be required. As discussed in the following section, we chose to exit the position in favor of a more attractive investment.

. . . .We sold our small position in Autodesk to help fund our purchase of Shopify. We still think Autodesk is an advantaged business, with 95%+ recurring revenue, dominant in its end market, and nice tailwinds behind digitization in that end market. It should be a durable grower over time, perhaps with continued fits and starts, but we found the risk-reward around Shopify to be more compelling”