Autodesk (Nasdaq: ADSK, $58.40), the multinational software company perhaps best known for the manufacture of AutoCAD design software, is scheduled to report earnings today following the closing bell.
The stock has been a choppy one for investors in 2015 – having opened the year at $60.83 shares fell to $54.01 then rallied all the way to $65 before declining to current levels. Shares are down nearly 3% year to date.
The stock has traded in a 52-week range of $48.38-$65, having it it’s 52-week week high on February 27 of the year.
Historically the stock moves significantly on earnings but does not swing wildly – shares have moved 5.8% on average following earnings announcements over the past 8 quarters.
The stock has rallied 3 of the past 4 quarters, and 5 of the past 8.
Analysts are calling for EPS of $0.28 on $636.56 Million in revenue, compare with $0.21 EPS on $592.5 million in revenue on year prior.
UBS reaffirmed their buy rating on UBS earlier this month, citing overdone concerns on macro fears (i.e. currency risk) and the success the company has head transitioning its business to a recurring revenue subscription model.
Since ADSK offers no weekly options (and since last week was May expiration for standard options), would-be earnings traders must turn to June options if they wish to play the earnings event.
As of the close of Monday’s session, the ADSK June 57.5 Straddle was trading $4.36-$4.54 and implying a move of roughly 7.6%. The same 60 Strike straddle traded slightly higher $4.45-$4.68 and implies a move of 7.8%.
In order to best isolate the catalyst event, earnings traders should always look to put on a position as close to the announcement as possible.
My Trade: Buy the ADSK June 60-62.5 Bull Call Spread for about $0.60
Risk: $60 per 1 lot
Reward: up to $190 per 1 lot
Break-even (stock price at expiration): $60.60
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