Autodesk Resilient in the Face of Transition and Persistent Headwinds; Maintain Fair Value Estimate

Wide-moat Autodesk reported fiscal 2023 fourth-quarter financial results that were largely consistent with our expectations. While results were short of full-year targets due to persistent macroeconomic headwinds, we are impressed by the firm’s resilience thus far and expect solid market demand to prevail in the medium term. Management’s guidance was on the lighter side, as it expects foreign-exchange headwinds to continue to pressure results and lower overall billings as customers transition to annual from multiyear contracts. We are maintaining our $230 fair value estimate and view headwinds as transitory for this high-quality stock. We view the shares, down 3% after hours, as slightly undervalued.