Bentley Systems (BSY) Stock Forecast & Price Target

Bentley Systems demonstrated a robust financial performance in Q4, achieving a 16% year-over-year increase in subscription revenue, amounting to $316 million, which aligns with the company's estimates and reflects resilience in a challenging macro environment. The company reported an annual recurring revenue (ARR) growth rate of 12% in constant currency, bolstered by the strong adoption of its E365 and Virtuosity offerings, as well as healthy demand from the public works and utilities sector that constitutes a significant portion of its revenues. Additionally, Bentley's net retention rate improved to 110%, indicating strong customer retention and potential for continued revenue growth as infrastructure project activity remains robust, particularly in the U.S. market driven by funding initiatives like the IIJA.

Bentley Systems is facing a negative outlook primarily due to ongoing challenges in its key end markets, particularly in commercial facilities and mining, which have not kept pace with global infrastructure growth. Additionally, the firm's EBITDA margins fell short of consensus expectations in Q4, and it anticipates only modest growth of approximately 10% for FY24 amidst ongoing market headwinds and competitive pressures from larger vendors. Furthermore, the firm's reliance on the public works and utilities sector, combined with risks such as macroeconomic fluctuations and changing customer preferences toward comprehensive SaaS solutions, may hinder its long-term financial performance.