Buy Recommendation for Dassault Systemes: Strong Subscription Growth and Attractive Valuation Amid Slight Guidance Adjustment

Stifel Nicolaus analyst Chandramouli Sriraman maintained a Buy rating on Dassault Systemes (0HB4 – Research Report) today and set a price target of €40.00.

Chandramouli Sriraman has given his Buy rating due to a combination of factors that highlight Dassault Systemes’ potential for growth and stability. Despite the first quarter results being slightly below expectations, with revenue and operating profit marginally under consensus, the company demonstrated resilience in its recurring revenue streams. Subscription growth showed a notable increase, indicating a strong demand for their offerings, particularly in the 3DEXPERIENCE platform, which saw significant growth driven by major deals in key sectors.
Furthermore, the company’s financial health is underscored by a free cash flow that exceeded expectations, suggesting efficient cash management. Although there was a slight adjustment in the full-year guidance with a minor reduction in margin expectations, the overall revenue growth outlook remains positive. The valuation of Dassault Systemes also appears attractive when compared to its peers, supporting the Buy recommendation as the stock trades at a reasonable multiple relative to both European and global software companies.

In another report released on April 16, Morgan Stanley also maintained a Buy rating on the stock with a €43.50 price target.