Analyst Note| Julie Bhusal Sharma |
Wide-moat Autodesk reported third-quarter financial results largely in line with our expectations. Sales growth, as in the prior quarter, was buoyed by strong year-over-year growth in subscription revenue. We believe that Autodesk continues to benefit from secular industry shifts toward cloud platforms and digital acceleration. At the same time, we think the market has factored in even greener pastures for the wide-moat name. With that in mind, we reiterate our $209 fair value estimate for Autodesk. Despite shares falling 12% after hours to $265 upon less optimistic billings guidance than what was previously given, we view shares as overvalued. Even though there's a gap between our fair value estimate and the market, we continue to consider Autodesk a very high-quality company with significant potential for the top and bottom lines over the long term.