Is the Altium (ASX: ALU) share price in the buy zone after its update?

The Altium Limited (ASX:ALU) share price dropped lower on Tuesday after the release of an update. Is this a buying opportunity?
The post Is the Altium (ASX: ALU) share price in the buy zone after its update? appeared first on The Motley Fool Australia. –

asx growth shares represented by question mark made out of cash notes

The Altium Limited (ASX: ALU) share price came under pressure on Tuesday following the release of a trading update.

The electronic design software company’s shares fell as much as 5% before recovering to end the day 2% lower at $30.13.

What did Altium announce?

Altium’s update revealed that trading conditions were tough during the six months ending 31 December.

In light of this, the company is expecting to report a 3% decline in first half revenue to US $89.6 million.

Management explained that this decline was “due to extreme COVID conditions in the US and Europe and challenging economic conditions, post COVID in China, for licence compliance activities.”

Positively, the company witnessed an improvement in trading conditions during the second quarter, which has given management confidence that the second half will be much stronger.

Altium’s CEO, Aram Mirkazemi, commented: “I am confident that with our pivot to the cloud and our move to digital sales that the Q2 momentum will continue into the second half.”

In light of this, the company has maintained its guidance for FY 2021.

Is this a buying opportunity?

According to analysts at Credit Suisse, this could be an opportune time to pick up Altium shares.

This morning the broker retained its outperform rating but with a revised price target of $35.00. While it was disappointed with its update, it notes that management has stated that its second half deal pipeline is significant.

Credit Suisse’s price target implies potential upside of 16% over the next 12 months.

Elsewhere, analysts at Goldman Sachs have retained their neutral rating. However, it is worth noting that their price target of $36.35 offers upside of 20% from yesterday’s close price.

That’s better than some of the potential returns on offer with shares that the broker has buy ratings on at present.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

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 recommends Altium. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Is the Altium (ASX: ALU) share price in the buy zone after its update? appeared first on The Motley Fool Australia.

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!