Analyst Note| Julie Bhusal Sharma |
Autodesk reported revenue and non-GAAP earnings in line with management’s outlook in its first-quarter results. The company continued to benefit from strength in subscription growth, which we think will lead to lasting benefits in upselling and operating leverage. While management’s outlook for fiscal 2021 certainly reflects a deceleration in growth, we are encouraged by Autodesk’s long-term growth prospects and relatively smooth weathering of coronavirus in its first quarter. We are confident that Autodesk will be able to endure the next several quarters with help from its healthy balance sheet and significant switching costs. As a result, we are maintaining our fair value estimate of $198 per share for this wide-moat stock. With the stock trading at $198 in after hours, this marks the stock returning to our fair value estimate after three months of market turmoil.