Subscription Revenue Fuels a Healthy Quarter for Dassault Systèmes; Shares Fairly Valued

Dassault Systèmes reported strong fourth-quarter results. We were pleased to see the firm clock in hefty subscription revenue growth even with overall weakness in China. In our view, the market reacted positively to the company’s strong constant currency outlook for fiscal 2023. Shares are up over 10% upon results, but we still believe Dassault shares are fairly valued. We are maintaining our EUR 37 ($40) per share fair value estimate for the wide-moat computer-assisted design company. Overall, we remain impressed by Dassault’s resilience in its core CAD and PLM markets and optimistic about its growth areas, such as in drug development.