Up 15% in a month, is ASX 200 tech share Altium on the comeback trail?

The Altium Ltd (ASX: ALU) share price was trading down 2% at $35.5 apiece at market close on Friday.

But zoom the picture out a little and we see that shares in the cloud software company have tracked 14.71% higher this month.

Meanwhile, the S&P/ASX All Technology Index (ASX: XTX) is down 5.21% for the month.

Does this mean Altium deserves a spot in your portfolio? Let’s look at what a broker had to say about it.

What did the broker say?

Bell Potter, an Australian capital markets company, gave Altium shares a buy rating on Tuesday.

Not only that, but the company landed Altium with a price target of $37.50, giving it a modest 4.9% upside at the time of writing.

The rating came after Altium posted a strong result for FY22, with shares gaining 18% following the announcement.

Bell Potter said it was a “cracking result” and posted the following observations:

FY22 EBITDA grew 33% to US$79.8m which was 6% above our forecast of US$75.4m. The beat was driven by higher revenue than forecast (US$220.8m vs BPe US$218.5m and guidance towards top end of US$209-217m) and a better EBITDA margin than forecast (36.2% vs BPe 34.5% and guidance towards low end of 34-36%).

Note there were no positive one-offs which drove the beat and the result was even negatively impacted by one-off costs of US$1.3m from relocating staff out of Ukraine (so that the underlying EBITDA margin was actually 36.7%).

The broker continued:

Altium provided FY23 guidance of revenue b/w US$255-265m and an EBITDA margin of b/w 35-37%. The company also provided a breakdown of the revenue guidance b/w US$195-200 in electronic design software and US$60-65m in engineering cloud platform.

Altium also reiterated its FY26 target of US$500m revenue and an EBITDA margin of 38-40% but said it believes it can now get there with <100,000 subscriptions.

Altium share price snapshot

The Altium share price is down 20.71% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 10.09% over the same period.

The company’s market capitalisation is $4.67 billion.

The post Up 15% in a month, is ASX 200 tech share Altium on the comeback trail? appeared first on The Motley Fool Australia.

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More reading

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• Experts name 3 ASX growth shares to buy in September
• ASX 200 reporting season weekly wrap: Top risers and fallers
• Could ASX 200 tech share Altium be in for another takeover approach?
• Here’s what you need to know about the Altium Group FY22 dividend

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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 Scott Phillips.

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