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  • Writer's pictureAbacus Research

Autodesk: A changed company in a changing industry

Autodesk is a changed company, with better long term growth drivers and pricing power than the market appreciates.

  • Average Revenue Per Subscriber (ARPS) will grow very quickly as discounting rolls off. Currently ADSK is receiving ~50% of list price. 

  • Operating leverage has been hidden due to shift to subscription. FY19 is the inflection year.

The long term drivers are very attractive:

  • Although the automation of the construction industry trend has been around for at least a decade, the adoption of technology in construction is gaining wide acceptance. 

  • BIM is at an inflection point due to better collaboration workflow enabled by cloud. 

  • Autodesk has the potential to become one of the dominant platforms in the construction vertical. 

Potential Upside: $184 (+40%): DCF based, fully expensing SBC. Estimate $2bn in FCF in 2022.

Sensible Downside: $107 (-18%): based on low growth scenario.

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