- Oppenheimer Analyst Ken Wong had an outperform rating Autodesk, Inc ADSK with a target price of $220.
- Autodesk reiterated its FY24 outlook and provided investors with context to support the long-term rule of a 45+ operating model (10-15% growth and 35%+ margins).
- CEO Andrew Anagnost highlighted the interconnectivity of platforms, end markets, diverse business models and data as enabling Autodesk’s growth strategy.
- Management updated the long-term TAM to $100 billion from $78 billion, driven by the convergence of AEC, manufacturing and M&E.
- Management broke the components of Autodesk’s long-term growth (10-15%) into three areas.
- Some investors worry that the sum of the lower ends of the growth ranges suggesting sub-double digits is a possibility, which management characterized as “rounding” while again emphasizing 10-15%.
- CFO Debbie Clifford highlighted balanced growth and optimizing the capital structure as pillars for creating long-term shareholder value.
- Clifford cited higher taxes as the primary delta for Autodesk’s withdrawal from its former status as a Rule of 55+ company. Management also pointed out that long-term operating margins are trending toward the low-end of 38%-40%.
- COO Steve Blum pointed out that affiliate compensation would be fully moved to the backend and Flex-based sales would be moved internally, potentially boosting long-term margins at the expense of short-term disruptions.
- Autodesk has a notable lead in cloud-based design tools with its 360 series, particularly Fusion. Fusion offers customers compelling value while offering attachment options that can push ARPU to over $5,000. Autodesk has found that monetization (70% 5-year CAGR) is significantly outpacing subscriber growth (40% CAGR).
- Price promotion: ADSK shares traded up 1.82% to $202.00 on the last check Thursday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
[ad_2]
Source story
