Morningstar | Mobile, social, collections, and SaaS: Autodesk's design for the future.
Autodesk is positioning itself to protect and extend its market leadership in computer-aided design. We believe the firm will remain a market leader over the long term, given its commitment to evolving with changing market trends; its recent investments in mobile platforms, social content, industry collections, and cloud technology exemplify this. Autodesk also aims to expand into adjacent markets such as product life cycle management and simulation and increase its presence in the underpenetrated manufacturing and construction sectors. Because of its strong position and encouraging growth trends, we forecast healthy midteens revenue growth over the next 10 years.We believe Autodesk's long-term growth depends on its ability to provide more value per customer and attract subscribers to its platforms. It has moved aggressively into the mobile and social markets through acquisitions like Socialcam, Instructables, and Pixlr. In addition, it has been an early mover into the cloud market relative to close competitors, with products such as BIM 360 and Fusion 360. The company's key growth enablers will include desktop rental, cloud services, and consumption-based pricing models. Given the premium placed on agility and the use of all-digital processes, we expect Autodesk's products to resonate well with current and future clients. Key growth segments will include manufacturing and construction. In these segments, we think Autodesk has the opportunity to disrupt incumbents with its relatively cheap and easily deployable products such as BIM 360 and Fusion 360. With management's new onus on driving recurring revenue, we forecast a long-term recurring revenue percentage in the mid-90s. Financially, the recurring revenue model is attractive, as it provides more long-term revenue, financial predictability, and a better feedback loop from customers. Through its multiyear business model transition, the firm expects to drive an annualized recurring revenue growth rate of 24%. This growth will be supported by 3% annualized revenue per subscription growth and 20% annual growth in subscriptions, which, based on current trends, looks attainable.Autodesk is a design software and services company. The company is engaged in 3D design, engineering and entertainment software and services. The company's product offerings include: AutoCAD, which is a customizable and extensible CAD application for design, drafting, detailing, and visualization; AutoCAD Civil 3D, which provides surveying, design, analysis, and documentation solution for civil engineering; CAM Solutions, which is a computer-aided manufacturing software that provides solutions for computer numeric control machining, inspection, and modeling for manufacturing; and Inventor, which provides tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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