What happened

Autodesk (ADSK -1.18%) shareholders outperformed a booming market last year as the stock jumped 43% compared to a 29% spike in the S&P 500, according to data provided by S&P Global Market Intelligence.

Shares had been tracking closely with the market by early fall but rallied significantly in the final weeks of the year.

A man smiles while sitting behind a laptop at a desk.

Image source: Getty Images.

So what

The software-as-a-service company is benefiting from strong demand for its design products in growing industries such as construction and architecture. However, investors are even more excited about how its shift toward subscription-based selling is paying off for the business. That move supported a 28% sales spike in the fiscal third quarter as operating margin improved to 13% of sales from 2% a year ago. Autodesk's cash flow is a testament to its strong business model, too, with free cash flow set to cross $1.3 billion this year compared to $300 million in 2018. 

Now what

Autodesk's 55% spike in billings last quarter suggests a strong finish to fiscal 2019, as do other key metrics including subscription revenue, earnings, and cash flow. Investors are looking for the company to post revenue of about $890 million when it announces Q4 results in late February or early March, for a 21% increase year over year. The stock's rally will depend on management hitting that goal while projecting another solid fiscal year ahead for the business.