Analyst Note| Julie Bhusal Sharma |
Autodesk reported yet another beat to its top line and bottom line in its third-quarter release. Results were driven by continued strength in Autodesk subscription revenue as conversion amongst its maintenance user base remains high. Additionally, Autodesk benefitted from its customers being in better financial health in the third quarter, as less payment extensions were made as a result of the coronavirus. Despite another great quarter for Autodesk, the company warned of the lagged effects they expect in fiscal 2022 as a result of the nature of subscription revenue recognition. While we previously had factored in such a lag, the effect is greater than we expected, moderating our fiscal 2022 expectations. Considering the rosy third-quarter results sobered by what could be an anomalous 2022 ahead, we are maintaining our fair value estimate of $198 per share for wide-moat Autodesk. Share have remained flat upon news of the quarter, leaving shares trading at $258 per share. As a result, we continue to believe Autodesk is overvalued. Nonetheless, we reiterate our continued belief that Autodesk has built an extremely moaty company which we think will be well protected in the future.