Why the Altium Share Price Soared Over 20% Today

The share price of American, Australian-domiciled software company Altium Limited [ASX:ALU] rose nearly 21% today, tacking on $5.68 to currently trade at $32.75. The company’s share price is up more than 119% over the past 12 months.

Altium is engaged in the development and sale of computer software for the design of electronic products. ALU is based in Australia with sales operations in the Americas, Europe, the Middle East, Africa, China and the Asia Pacific.

Altium share price

Source: marketindex.com.au

Altium exceeds consensus forecasts

Altium released its half yearly results just after trading finished yesterday, with results exceeding analysts’ forecasts.

The design software company is on track to hit over AU$300 million in revenue next year, citing strong growth in China as a key driver of the 24% revenue boost the company received this half.

Revenue for 1H FY19 was $78.1 million, up from $63.2 million in the previous corresponding period. Net profit was up 58% to $23.4 million.

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Altium said its strong performance positions them well to achieve their 2020 revenue target of US$200 million. All segments experienced double digit revenue growth leading to increased profits.

The big highlight was the EBITDA margin. Despite significant investment back into the company, Altium’s margin hit 36.3%, exhibiting a strong operating leverage.

Company CEO, Aram Mirkazemi, believes if the company can hit 100,000 users their EBITDA margin will be at least 40%, if not ‘significantly higher’.

Already looking towards 2025

In its half yearly result Altium outlined its outlook for the coming decade. The company stated its dedication to become the market leader in printed circuit board (PCB) design software and to achieve US$200 million in revenue by 2020.

News announced with the investor presentation remarked that the company has set a 2025 revenue target of $500 million. Mr Mirkazemi said he has absolutely no doubt we will be able to reach this goal.

Mr Mirkazemi was bullish about all aspects of the business, but said Altium’s top priority this year was recruiting top talent.

While on occasion we’ve been able to attract high-level talent, we need to do this systematically and on a large scale…and it goes beyond HR recruitment strategies. This will be my No.1 priority.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is one of Money Morning’s junior analysts. Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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