With a forward price-to-earnings ratio of nearly 3,000 and an enterprise value nearly $1 billion less than its current market capitalization, software designer Autodesk (NSDQ: ADSK) is either one of the most overvalued stocks on Wall Street or about to become enormously profitable, but not both. With its next quarterly earnings report only one week away, I believe this may be a good time to short the stock by buying slightly out-of-the-money puts that could escalate rapidly if the company falls short of expectations.

On the plus side is Autodesk’s expertise in augmented reality (AR). Autodesk’s share price has risen 20% since the U.S. release of Pokémon Go, a video game whose ardent players have gotten a lot of press lately for bumping into lampposts as they hunt imaginary beings among real objects thanks to the game’s sophisticated AR software. I don’t know what that obsessiveness is worth in terms of revenue, but based on Autodesk’s share price, some investors think it’s extremely valuable.

The stock’s minuses are easier to quantify. Autodesk’s net operating income has declined for the past three years, deteriorating from positive to negative over the past fiscal year. That would be acceptable if revenue was growing, but it isn’t. Even that wouldn’t be a huge problem if expenses weren’t rising rapidly, but they are. So financially Autodesk appears to be burning the candle at both ends, betting on either a buyout or sudden reversal of fortune to get its balance sheet on firmer footing.

The Case for a Crash

Certainly, Autodesk is accruing debt at an alarming rate. Long-term debt nearly doubled in the past fiscal year, going from $743 million at the end of January 2015 to $1.48 billion last January. Meanwhile, the company’s cash has been declining the past three years. Autodesk does not yet have a solvency problem, but even a crumb of bad news could prompt analysts to downgrade the stock.

It’s been nearly a year since an analyst has done so. In November 2015 RBC reduced Autodesk from “outperform” to “sector perform.” Of the 19 Wall Street investment banking firms that actively follow Autodesk, only one believes the stock will underperform; the remaining 18 rate it as a “strong buy” or “buy.” That leaves little room for improvement and plenty of space for the stock to slide if its popularity begins to wane.

So just how far could the share price drop if the news next week catches the market by surprise? Six months ago, when the U.S. stock market experienced a quick 10% correction, Autodesk shares fell more than three times that amount, from above $65 to below $43 in only 10 weeks. A year earlier the stock did virtually the same thing, dropping from $64 to $43 as China’s slowing economy and crashing stock market sucked down many momentum stocks with it.

Nevertheless, shorting a stock like Autodesk can be as dangerous as buying it because the price can skyrocket suddenly. Just as the share price tanked twice during the past 18 months, it also recovered quickly, so timing is everything. What is clear is that the stock faced strong resistance at $65, just a few dollars above where it currently trades (see chart). It also has equally strong support at $45, so the stock appears to be approaching the upper end of its trading range right before its next earnings report is due to be released.

There is also a practical reason to believe Autodesk may be nearing a reality check. Approximately 95% of its stock is owned by insiders and institutional investors, mostly mutual fund companies such as Vanguard (for its passively managed index exchange-traded funds) and Fidelity. That means there isn’t much more stock for them to buy but plenty to sell if they decide it’s time to exit the name.

The Acquisition Argument

The strongest argument for Autodesk’s stock price going higher is its place as a leader in the AR field, along with growing sentiment that huge companies like Google and Apple could acquire Autodesk and all of its intellectual property rights. Earlier this week, in an interview with The Washington Post, Apple CEO Tim Cook hinted at using some of his company’s enormous cash resources to move into the AR space.

But neither Apple nor Google has expressed any interest in acquiring Autodesk, and their preferred method of expanding into a new field is to recruit talented employees from other companies instead of buying those companies outright. Apple hasn’t shown any interest in buying Tesla but has poached many of its best engineers to work on Apple’s smart car. If Tim Cook really wants to get into the AR market, I suspect he will go after some of Autodesk’s people and pass on the company.

Even so, what I am recommending is speculative and only for investors with a high-risk tolerance. Specifically, with Autodesk stock trading at $63, you can purchase a put that expires on Oct. 21 with a strike price of $60 for $2.25 as of this writing. If Autodesk never drops below $60 before that date, you will lose all of your money, but if the price drops to $55, you can more than double your money. In fact, for every penny Autodesk drops below $60 by Oct. 21, this put will gain a penny in value. That means your breakeven price, or the point at which you recover the original cost of the put, is $57.75. Incidentally, you don’t have to own Autodesk stock to execute this trade; you can simply sell the put at a later date or wait until maturity to cash out.

Action: Buy Put

Symbol: ADSK 161021 P 00060000

Price: $2.25 or less