Autodesk, Inc.ADSKNASDAQ

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DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $179.76 per share(market-calibrated)

-29.3%

Upside to Fair Value

Current

$254.26

Pure Model

$172.56

Fair Value

$179.76

Bull Case

$229.31

Bear Case

$124.78

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

8.26%

Calibrated Growth

4.88%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $172.56.

What's Driving This Ratingfor ADSK

✓

CapEx already efficient

CapEx at 0.80% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 20.65% — below the sector mature average of 25.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $3.5B (23.57% margin).

→

Moderate revenue growth

Analyst consensus projects -0.54% revenue growth, fading to 3.75% by Year 10. Revenue reaches $15.0B (vs $7.2B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $113.76/share (15.1x terminal FCF) while exit multiple gives $231.36/share (41.0x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $254.26, the market implies 8.26% perpetual growth — 451bps above the model's 3.75%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 68.23% indicates efficient cash generation. FCF reaches $2.6B by Year 10 (17.62% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.47

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)11.10%

Cost of Debt

Pre-tax Cost of Debt1.08%

Tax Rate29.88%

After-tax Cost of Debt0.76%

Equity Weight (E/V)95.19%

Debt Weight (D/V)4.81%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (95.19% × 11.10%) + (4.81% × 0.76%)

= 10.60%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$7.2B	$9.0B	$11.0B	$12.9B	$15.0B
EBIT	$1.5B	$1.9B	$2.3B	$2.9B	$3.5B
Tax	$442M	$553M	$678M	$859M	$1.1B
NOPAT	$1.0B	$1.3B	$1.6B	$2.0B	$2.5B
+ Depreciation	$162M	$202M	$248M	$292M	$339M
- Capex	$57M	$72M	$88M	$104M	$120M
- Δ NWC	-$4M	$83M	$105M	$94M	$54M
Free Cash Flow	$1.1B	$1.3B	$1.6B	$2.1B	$2.6B
Discount Factor	0.904	0.739	0.604	0.494	0.365
Present Value	$1.0B	$995M	$993M	$1.0B	$967M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.6B

Terminal Growth Rate3.75%

WACC10.60%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$40.1B

PV of Terminal Value$14.6B

Exit Multiple Method

Year 10 EBITDA$3.9B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$108.7B

PV of Terminal Value$39.7B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$10.1B

PV of Terminal Value$14.6B

Enterprise Value$24.7B

(-) Net Debt$485M

Equity Value$24.2B

Shares Outstanding213M

Price per Share$113.76

Exit Multiple Method

PV of Projected FCFs$10.1B

PV of Terminal Value$39.7B

Enterprise Value$49.8B

(-) Net Debt$485M

Equity Value$49.3B

Shares Outstanding213M

Price per Share$231.36

Pure Model Fair Value

$172.56

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
8.60%	$209.73	$214.45	$220.14	$227.14	$235.95
9.60%	$186.76	$189.88	$193.55	$197.89	$203.13
10.60%	$167.89	$170.07	$172.56	$175.44	$178.81
11.60%	$151.98	$153.55	$155.31	$157.32	$159.61
12.60%	$138.31	$139.47	$140.76	$142.21	$143.84

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$124.78

-50.9% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.83

Base Case

$172.56

-32.1% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 1.47

Bull Case

$229.31

-9.8% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 1.25

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-0.54%

Year 3 Revenue Growth10.15%

Year 5 Revenue Growth10.63%

Year 7 Revenue Growth7.88%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin20.65%

Terminal EBIT Margin25.00%

Tax Rate29.88%

Historical Capex / Rev0.80%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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