With Altium reducing pricing to increase revenue is this a god thing?

Altium Limited (ASX: ALU) is engaged in the development and sales of computer software for the design of electronic products. Its products include Altium Designer and TASKING. Its segments include Board and Systems, Micro-controllers and Embedded Systems, Makers and Content, and Other Segments.

Board and Systems segment includes results from printed circuit board (PCB) business for the Americas, Europe, the Middle East and Africa (EMEA), Asia Pacific and Emerging Markets regions, as well as other products sold through partner channels.

Emerging Markets region includes results from PCB business for the China, Russia, and India regions. Micro-controller and Embedded Systems segment includes results from TASKING sales, operations, and research and development. Makers and Content segment includes results from Octopart.

Its products and services include software and hardware, subscription services and training services. It also develops fully-cloud; fully-collaborative electronics design system. (Profile source: Reuters)

From the Company Reports

Outstanding Financial Results

Investing to Accelerate Future Growth

Electronic design software company Altium Limited (ASX: ALU) on 19 August 2019 announced its final, audited results for the financial year ended 30 June 2019.

(Graphic Source – Company Reports)

Altium achieved outstanding revenue growth across all business units and all key regions of 23% to US$171.8 million for the financial year ended 30 June 2019. Altium expanded profit margins to record levels with a 41% increase in net profit after tax to US$52.9 million and EPS growth of 41%. Other highlights include:

  • Record growth in new Altium Designer seats of 27%. 
  • Record growth of 13% subscription base to more than 43,600 subscribers.
  • China led the outstanding growth in revenue up by 37%. 
  • US and EMEA delivered great performances with 14% and 20% revenue growth. 
  • Board and Systems revenue grew by 17% to US$126.8 million. 
  • Octopart continued its leading performance delivering 49% growth in revenue. 
  • TASKING delivered strong revenue growth of 37%.
  • EBITDA margin of 36.5% up from 32.0%. 
  • EPS of 40.57 cents (up 41%). 
  • Operating cash flow up 42% to US$69.1 million. 
  • A final dividend of AUD 18 cents with full-year dividends up 26%.

Financials

The company’s EPS stands at $0.579. The P/E Ratio is 60.0. The Company currently offers an Annual Dividend Yield of 0.98%. The stock has a market cap of $4.55 billion and a share volume of 130.97 million. The stock has a 52-week range of $20.55 – $38.49 (Data Source – Company Reports)

The company is increasing the efficiency and reach of its transactional sales model and rolling out their new cloud platform Altium 365. These initiatives will power Altium’s drive to market dominance and the achievement of its 2025 targets of 100,000 subscribers and US$500 million in revenue. 

For the Full Year of Fiscal 2020, Altium anticipates revenue in the range of US$205 million to US$215 million and EBITDA margin in the range of 37% to 38%. 

Altium has been one of the top performers on ASX in the last 1 year. It is near very strong support.

https://www.marketindex.com.au/asx/alu

It can retrace a bit in the near term. The stock seems set for a potentially bullish up move.

PROPHET INVEST is BULLISH ON ALTIUM AT THE CURRENT PRICE OF $34.34

Disclaimer: [The above is opinion only and is not financial advice, consult your financial advisor before making any investment decisions.]

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