ADSK
"Autodesk's SEC and DOJ investigations both closed with no charges, yet the stock trades at ~19x forward PE -- bottom decile of its 5-year range. Is the market still pricing a risk that no longer exists?"
Autodesk is the dominant provider of design software for architecture, engineering, construction, and manufacturing, with $6.1B in annual revenue and 93% subscription mix. The company confirmed deliberate manipulation of FCF and non-GAAP metrics tied to executive compensation, but both the SEC and U.S. Attorney's Office closed their investigations in August 2025 without enforcement action. The stock trades at ~19x forward PE versus a software peer range of 25-35x, despite accelerating revenue growth, expanding margins, and $7.4B in remaining performance obligations.
Executive Summary
Cross-lens roll-up assessment
Autodesk is a structurally sound business with confirmed but narrowly-scoped accounting integrity concerns. Three independent lenses confirmed revenue as DURABLE (93% subscription, $7.4B RPO, diversified base, high switching costs), competitive position as DEFENSIBLE (heterogeneous switching costs protecting ~75% of revenue, reinforced by BIM mandates), and regulatory exposure as MINIMAL. However, the Fugazi Filter identified CONCERNING accounting integrity based on confirmed deliberate manipulation of FCF and non-GAAP metrics. The market narrative appears anchored to the 2024 investigation despite all three catalysts (SEC, DOJ, Starboard proxy fight) having been resolved, creating a valuation compression to ~19x forward PE -- bottom decile of the 5-year range and well below the 25-35x software peer group.
PROCEED_WITH_CAUTION because: (1) the core business fundamentals are genuinely strong across multiple independent lenses -- DURABLE revenue, DEFENSIBLE moat, MINIMAL regulatory exposure; (2) the accounting manipulation, while confirmed and deliberate, was narrow in scope (non-GAAP timing for compensation purposes), and both regulatory investigations have closed; (3) the current valuation at ~19x forward PE appears compressed relative to fundamentals. Not STANDARD_DILIGENCE because the confirmed deliberate manipulation, unknown compensation reform status, and ongoing securities class actions warrant elevated monitoring. Not HIGHER_SCRUTINY because the structural integrity of the business is well-established across three independent lenses with E3 evidence.
Key Takeaways
- •REVENUE_DURABILITY is DURABLE (E3, HIGH confidence, confirmed by 2 lenses) -- 93.2% subscription revenue, $7.4B RPO growing 20%, no customer concentration, 9-10% organic growth, multi-mechanism switching costs. The committee upgraded from CONDITIONAL after identifying that initial concerns were measurement transparency issues, not structural fragility.
- •ACCOUNTING_INTEGRITY is CONCERNING (E3, HIGH confidence) -- Audit Committee confirmed deliberate FCF/non-GAAP manipulation tied to executive compensation. No GAAP restatement required. Both SEC and USAO closed investigations August 2025 without enforcement action. Manipulation was small in magnitude (mid-single-digit basis points on FCF margins) but deliberate in nature.
- •COMPETITIVE_POSITION is DEFENSIBLE (E2, HIGH confidence) -- Deep heterogeneous switching costs protect ~75% of revenue (AECO + AutoCAD), reinforced by BIM mandate regulatory barriers in UK, Singapore, and EU. Manufacturing segment (19%) is contested. Moat trajectory is stable but faces genuinely uncertain AI disruption risk.
- •NARRATIVE_REALITY_GAP is DIVERGING (E3, HIGH confidence) -- Market narrative anchored to 2024 investigation while operational metrics improve across all dimensions. Gap decomposition: ~65% narrative lag, ~35% rational governance discount. Forward PE of ~19x implies expectations well below current delivery trajectory.
- •GOVERNANCE_ALIGNMENT is MIXED (E2, MEDIUM confidence) with a cross-lens conflict -- Fugazi Filter rates MIXED (reporting integrity concerns), Insider Investigator rates ALIGNED (zero discretionary selling, CEO retains $66M position, full regulatory clearance). Both assessments are valid within their lens scope.
- •TAIL_RISK_SEVERITY is MATERIAL (E2, MEDIUM confidence) -- 5 compound failure scenarios identified. AI seat compression is most probable near-term (20-40% within 3 years). Only AI tool replacement (3-8% within 3 years) threatens existential risk. All scenarios are survivable given $2.3B annual FCF.
Key Tensions
- •Confirmed Accounting Manipulation vs. Strong Operational Metrics -- the numbers are structurally sound (DURABLE revenue, DEFENSIBLE moat) but the people presenting them have a confirmed history of manipulating non-GAAP metrics. The manipulation was narrow in scope (presentation, not substance) but deliberate in nature.
- •Compressed Valuation vs. NRR Non-Disclosure -- if Autodesk is significantly undervalued at 19x forward PE, the refusal to disclose net revenue retention rate is puzzling. Healthy NRR disclosure would likely accelerate the narrative update. The committee treated non-disclosure as a data gap rather than a red flag, but this interpretation was not adversarially tested.
- •Defensible Moat vs. AI Disruption Uncertainty -- switching costs protect ~75% of revenue today, but an AI-native design tool achieving BIM compliance would simultaneously eliminate training investment, file format lock-in, and regulatory barriers. The 3-8% near-term probability is low but the impact would be severe.
Fugazi Filter
Are the numbers trustworthy?
Dual-Axis Risk Classification
Position shows Accounting Integrity × Funding Fragility
Accounting practices raise questions that warrant deeper investigation before investment. The numbers may not fully reflect economic reality.
Key FindingsClick to expand details
Signal AssessmentsClick for full context
| Signal | Scale | Assessment | Evidence |
|---|---|---|---|
Accounting Integrity | — | CONCERNING | 3Triangulated |
Governance Alignment | — | MIXED | 2Corroborated |
Model Debates
Cross-Lens Insights
Where Lenses Agree
- Revenue foundation is structurally sound
- Regulatory and legal overhang has cleared
- Market valuation appears compressed relative to fundamentals
Where Lenses Differ
GOVERNANCE_ALIGNMENT
The Fugazi Filter evaluates governance as it relates to financial reporting integrity (where confirmed manipulation warrants MIXED). The Insider Investigator evaluates governance as revealed by trading behavior (where patterns are clearly ALIGNED).
ACCOUNTING_INTEGRITY vs Operational Metrics
The Fugazi Filter found confirmed deliberate manipulation, which creates residual concern about financial reporting trustworthiness. Revenue Revealer and Gravy Gauge found the underlying business metrics are structurally sound.
The following publicly available documents were collected and extracted into a structured fact dossier that powered this analysis.
SEC Filing
- Annual Report (10-K) -- FY2025 (ended Jan 31, 2025)
- Quarterly Report (10-Q) -- Q3 FY2026 (Oct 31, 2025)
- Quarterly Report (10-Q) -- Q2 FY2026 (Jul 31, 2025)
- Quarterly Report (10-Q) -- Q1 FY2026 (Apr 30, 2025)
- Quarterly Report (10-Q) -- Q3 FY2025 (Oct 31, 2024)
- Current Report (8-K) -- Jan 22, 2026 Restructuring
- Current Report (8-K) -- Q3 FY2026 Earnings (Nov 2025)
- Current Report (8-K) -- Q2 FY2026 Earnings / Investigation Closure (Aug 2025)
- Proxy Statement (DEFA14A) -- May 2025
- Schedule 13D/A -- Starboard Value (historical)
- Form 4 Filings -- 20 filings reviewed (Jun-Dec 2025)
- Form 144 Filings -- 10 filings reviewed (Jun-Sep 2025)
Earnings Transcript
- Q3 FY2026 Earnings Call Transcript (Nov 2025)
- Q2 FY2026 Earnings Call Transcript (Aug 2025)
- Q1 FY2026 Earnings Call Transcript (May 2025)
- Q4 FY2025 Earnings Call Transcript (Mar 2025)
Research Document
- Starboard Value Activist Presentation (Aug 2024)
- Accounting Investigation Timeline and Findings Summary
- CourtListener Litigation Results (10 cases)
Web Source
- Google Trends -- AutoCAD, Revit search interest data