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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