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Altium share price hits a record high: What to expect with its half year results

James Mickleboro
Superhero child reaching higher

The Altium Limited (ASX: ALU) share price has been a positive performer on Monday ahead of its half year results release.

In afternoon trade the design software company’s shares hit an all-time high of $42.54.

This appears to indicate that investors are confident that Altium will deliver on the market’s expectations later today when it releases its results.

What is the market expecting?

According to a note out of Goldman Sachs, it expects Altium’s growth to be heavily skewed to the second half.

It expects the company to deliver first half revenue of US$95.3 million, reported EBITDA of US$33.5 million, and a reported net profit after tax of US$24.3 million. This represents growth of 25.6%, 18%, and 3.9%, respectively, over the prior corresponding period.

For the full year, the broker has forecast revenue of US$210.5 million, reported EBITDA of US$80.1 million, and reported net profit after tax of US$58.9 million. Which represents year on year growth of 22.9%, 18%, and 17.3%, respectively. It also implies a full year reported EBITDA margin of 38%.

Goldman’s forecasts are in line with the company’s guidance for FY 2020. It has previously guided to revenues of US$205 million to US$215 million with an EBITDA margin of 37% to 38%.

Though, it is worth noting that Goldman Sachs has a neutral rating and $33.55 price target on its shares. This makes it one of the least bullish brokers out there.

Given that Altium’s shares are changing hands for more than $42.00 today, it appears to indicate that the market expects Altium to smash Goldman’s estimates.

What else should you watch out for?

Other items of note to watch out for today include the launch of Altium 365. This platform launched in November and could be a key driver of growth in the future. Goldman Sachs will be looking for commentary on its initial performance and client uptake.

It will also be looking to see if Altium is on target to hit 50,000 subscribers in FY 2020 and on a path to achieve 100,000 subscribers by FY 2025.

And finally, it will be looking for commentary on its Dassault partnership. It notes that this partnership is expected to allow Altium to penetrate high-end use industries like passenger aircraft manufacturers and automotive industries. The broker will be looking for commentary on whether there have been any early wins with new customers.

Altium isn’t the only tech share hitting a record high today. Also scaling new heights today were the shares of Megaport Ltd (ASX: MP1) and Pushpay Holdings Ltd (ASX: PPH).

The post Altium share price hits a record high: What to expect with its half year results appeared first on Motley Fool Australia.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020