Here’s what this top broker thinks of the Altium (ASX:ALU) share price

Is the Altium share price good value?
The post Here’s what this top broker thinks of the Altium (ASX:ALU) share price appeared first on The Motley Fool Australia. –

It has been a disappointing year so far for the Altium Limited (ASX: ALU) share price.

Since the start of the year, the electronic design software provider’s shares have fallen 10% to $31.08.

Is the Altium share price weakness a buying opportunity?

One leading broker isn’t sure this is a buying opportunity and feels the Altium share price could be trading around fair value present.

According to a note out of Bell Potter, its analysts have a hold rating and $32.50 price target on the company’s shares.

Based on the current Altium share price, this implies modest upside of 4.5% over the next 12 months.

What is Bell Potter saying?

Bell Potter was a touch underwhelmed with the company’s performance in FY 2021. While its revenues from continuing operations came in a touch above its estimates, its earnings fell well short due to weaker margins.

Unfortunately, those weaker margins are expected to persist, which has led to Bell Potter downgrading its earnings estimates.

The broker explained: “We have modestly downgraded our EBITDA and NPAT forecasts by around 3% in both FY22 and FY23. The downgrades have been driven by reductions in our margin estimates which have more than offset increases in our revenue forecasts. We now forecast FY22 revenue and EBITDA of US$214.1m and US$76.5m respectively.”

In light of this, the broker doesn’t see enough value in the Altium share price to warrant a buy rating.

It commented: “We have updated each valuation used in the determination of our price target for the earnings changes and also reduced the premium we apply in the relative valuations from 25% to 10% given the strong rally in some of the comps (e.g. WiseTech). The net result is a 7% decrease in our PT to $32.50 and we maintain the HOLD rec.”

The post Here’s what this top broker thinks of the Altium (ASX:ALU) share price appeared first on The Motley Fool Australia.

Should you invest $1,000 in Altium right now?

Before you consider Altium, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Altium wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

How have ASX technology shares performed during the August 2021 earnings season?

3 excellent ASX 200 (ASX:XJO) shares worth a closer look

ASX 200 Weekly Wrap: ASX puts earnings season to bed with another rise

Top brokers name 3 ASX shares to buy next week

Here’s a look at how ASX WAAAX shares compare on growth

Motley Fool contributor 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 and has recommended Altium. The Motley Fool Australia owns shares of and has recommended Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!