Dassault Systèmes (ENXTPA:DSY) Is Down 12.4% After Lowering Revenue Outlook and Missing Q3 Estimates - What's Changed

• Earlier this month, Dassault Systèmes cut its annual revenue growth outlook to 4%-6% for 2025 and reported third-quarter results that came in below expectations, while reaffirming its 7%-10% diluted EPS growth target.
• An expanded partnership between Medidata, a Dassault Systèmes company, and Sanofi to advance clinical research highlights the potential for innovation within its Life Sciences segment, despite current challenges.
• We will examine how Dassault Systèmes' lowered full-year revenue guidance impacts its previously established investment narrative and earnings outlook.

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Dassault Systèmes Investment Narrative Recap

To own Dassault Systèmes, an investor must believe in the company’s ability to drive long-term growth through greater adoption of digitalization, automation, and AI-powered solutions across key industries. The recent lowering of full-year revenue guidance to 4%-6% poses a challenge to this thesis, as it brings renewed focus to execution risks in newer product lines, but its reaffirmed EPS growth target suggests the impact on short-term profitability catalysts is not material for now. The biggest risk remains persistent weakness or delays in Life Sciences and cloud platforms, which could weigh on future recurring revenue growth if not addressed.

Among recent announcements, the expanded partnership between Medidata and Sanofi is especially relevant. This collaboration directly targets innovation and efficiency in clinical research using Medidata’s platforms, an area under pressure for Dassault Systèmes. In context, while this deal could support sentiment around near-term revenue potential in Life Sciences, investors will be watching for signs of sustainable improvement given Medidata's ongoing challenges.

However, investors should also be aware that, unlike profitability, revenue growth faces near-term headwinds from...

Read the full narrative on Dassault Systèmes (it's free!)

Dassault Systèmes is projected to reach €7.6 billion in revenue and €1.7 billion in earnings by 2028. This outlook assumes a 6.2% annual revenue growth rate and a €0.6 billion increase in earnings from today's €1.1 billion.

Uncover how Dassault Systèmes' forecasts yield a €34.91 fair value, a 36% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided four fair value estimates for Dassault Systèmes, ranging from €10 to €46 per share. Cloud platform execution risk remains front of mind, which could affect how different investors see the company’s prospects and value.

Explore 4 other fair value estimates on Dassault Systèmes - why the stock might be worth as much as 79% more than the current price!

Build Your Own Dassault Systèmes Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Dassault Systèmes research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Dassault Systèmes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Dassault Systèmes' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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