The Altium Limited (ASX: ALU) share price has slumped 6.7% lower in 2020 but is the Aussie tech company a steal at the current price of $32.41 per share?
Why the Altium share price could be a steal
Altium is a multinational software business that focuses on electronic design systems for 3D-printed circuit boards (PCBs). Altium is part of the ‘WAAAX’ group of tech shares which have been on a rollercoaster ride in 2020.
The recent bear market crushed the S&P/ASX 200 Index (ASX: XJO) before recovering in April and May. The Altium share price was no different, falling 38.1% in one month from 17 February to 17 March.
Altium is trading at $32.41 right now and would have been a steal at its 52-week low of $23.11. Clearly, the best time to buy was 5 years ago but the next best time could be today.
Altium’s value hasn’t surged higher in the way that Afterpay Ltd (ASX: APT) has in recent weeks. But not every ASX 200 share is Afterpay and that’s a tough benchmark to compete against.
The economy is starting to warm up again which is good news for Altium’s earnings.
Investors have been bullish on the Altium share price in recent weeks. Tech shares have been doing well on both the ASX 200 and overseas in the S&P 500 Index.
I think part of the appeal is the stable earnings that software as a service (SaaS) companies can generate.
Altium has a strong development pipeline which is promising for the future. The group’s new cloud platform, Altium 365, could be the next step towards an integrated design platform for both supply chain and manufacturing.
If Altium can continue to capture more market share, the Altium share price could be a steal at its current $4.2 billion valuation.
Foolish takeaway
The Altium share price has recovered strongly since bottoming out in March. With a strong growth profile in the decades ahead, Altium could be the steal of the century if earnings continue to grow.
Here are some more ASX shares with strong growth potential in the decades ahead.
5 stocks under $5
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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*Extreme Opportunities returns as of June 5th 2020
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Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of AFTERPAY T 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 post Is the Altium share price the steal of the century? appeared first on Motley Fool Australia.
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