Sell Recommendation for Dassault Systemes Due to Unsustainable Revenue Model

Jefferies analyst Hannes Leitner maintained a Sell rating on Dassault Systemes (0HB4 – Research Report) today and set a price target of €27.00.

Hannes Leitner has given his Sell rating due to a combination of factors impacting Dassault Systemes. One primary concern is the company’s reliance on license sales rather than focusing on bolstering recurring revenue streams. This revenue model, according to Leitner, could potentially have adverse effects on the company’s valuation multiple.
Although Dassault Systemes’ overall numbers and guidance seem to align with market expectations, Leitner believes the source of revenue growth is not sustainable in the long term. The emphasis on license revenue, as opposed to recurring income, may undermine the company’s financial stability and growth prospects, prompting the Sell recommendation.