The Fortescue Metals Group Limited (ASX: FMG) share price has come under pressure on Wednesday.

In morning trade, the iron ore producer’s shares are down 2% to $19.98.

Why is the Fortescue share price tumbling lower?

Investors have been selling Fortescue’s shares this morning after it was the subject of a broker note out of Goldman Sachs.

According to the note, the broker has downgraded the company’s shares to a sell rating and cut the price target on them to $18.90.

This price target implies potential downside of 5.5% over the next 12 months.

Why did Goldman downgrade Fortescue’s shares?

There were a number of factors that led to Goldman Sachs downgrading the Fortescue share price this morning.

One of the main ones was its relative valuation. It notes that Fortescue’s shares are changing hands at 1.4x net asset value (NAV). This compares unfavourably to BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), which are trading at 0.95x NAV.

Goldman also estimates that its shares will be trading at 8x estimated FY 2023 operating earnings when iron ore prices retreat to the US$80 per tonne to US$90 per tonne level. Whereas BHP and Rio Tinto’s shares will be trading at 4.5x to 5x operating earnings.

Why else is Goldman bearish?

The broker also has concerns over the widening of lower grade iron ore prices in comparison to benchmark iron ore.

It is expecting low grade 58% iron ore product discounts or realisations to widen from the current c~87%-90% level to 80% by the year-end. Combined with an expected ~35% drop in the benchmark 62% Index price, this doesn’t bode well for Fortescue.

Goldman explained: “China steel curtailments which could drive the steel price and margins higher making higher grade iron ore more favourable on a Value-in-Use (VIU) basis. We assume FMG’s realisations drop 10% from 91% achieved in Dec Q in 2020 to 81% by the end of 2021. We have already started to see steel mills switching to higher grade iron ore since Chinese steel mill gross profit margins have climbed above RMB500/t.”

All in all, Goldman doesn’t see enough value in the Fortescue share price now and recommends investors look elsewhere in the sector.

More reading

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• 2 high yield ASX dividend shares rated as buys
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Johnson & Johnson (NYSE: JNJ) has what many Americans want: a one-dose COVID-19 vaccine. I know people who waited on vaccination specifically to get the J&J jab. The U.S. Food and Drug Administration (FDA) granted the company Emergency Use Authorization in late February. That’s two months after the authorization of two-dose vaccines from Pfizer and Moderna. And last month the U.S. ordered an additional 100 million J&J doses. It ordered an initial 100 million doses last year.

The momentum slammed to a halt this week, though. The FDA and the Centers for Disease Control and Prevention (CDC) recommended a pause in the administration of the J&J vaccine after the occurrence of “rare and severe” blood clots in some people. Now investors may be wondering what this means for J&J’s future in the vaccine space — and its share price. Here’s what you need to know.

A rare occurence

First, we should put the situation into perspective. J&J has vaccinated more than 6.8 million people in the U.S. so far. Six cases of blood clots have been reported. So this remains an exceptionally rare occurrence. The FDA says it recommends the halt “out of an abundance of caution.”

The CDC is meeting with an immunization practices advisory committee on Wednesday to examine the cases. And the FDA is also investigating. The agencies recommend the vaccination halt until their review is complete.

The people who experienced the blood clots were women between the ages of 18 and 48. Symptoms appeared six to 13 days after vaccination. The blood clots — cerebral venous sinus thrombosis — are of a type usually treated with the anticoagulant drug heparin. But health officials say that in these cases heparin could be dangerous — and that means a different treatment must be used.

It’s impossible to predict the review’s outcome. But we can use the clues we have to imagine potential scenarios.

Considering there is a pattern so far — women in a certain age group — the agencies may allow vaccination to resume in those who aren’t in this group. It’s also possible the agencies will learn why the clotting events occurred and how to prevent them in the future. In that case, vaccination might resume in everyone age 18 and older.

It’s also possible experts won’t learn exactly why these events occurred. But due to their rarity, the agencies may allow vaccinations in all groups to resume — as long as healthcare providers have a blood clot treatment plan in place.

“Recognition and management”

The FDA emphasized the idea of awareness among practitioners. The agency said the vaccination pause is important “to ensure that the healthcare provider community is aware of the potential for these adverse events and can plan for proper recognition and management.”

So I’m optimistic this is about developing the best plan of use for the J&J vaccine — not about taking it off the market.

Now, investors may be wondering what this pause means for J&J earnings. The answer is: nothing. J&J has pledged to sell its vaccine without taking a profit during the pandemic. This means any dip in vaccine use or sales won’t hurt earnings.

J&J may raise the price of its vaccine after the pandemic is over — in which case gains or declines in sales will add to or reduce profit. But even at that point, J&J investors shouldn’t expect a huge impact. The company’s vast array of products means it doesn’t rely on just one for revenue or sales growth. For instance, J&J’s full-year 2020 revenue totaled more than $82 billion. And the company’s products span the categories of consumer health, pharmaceuticals, and medical devices.

How about share price? The shares may dip in the short term on this pause in vaccination. But I don’t expect any declines to last for very long. Pharmaceutical stocks haven’t been as sensitive to vaccine news as biotech stocks. Again, that’s because they don’t depend on just one product. So J&J shares remain a solid healthcare investment for the long term.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• U.S. gives Johnson & Johnson’s COVID-19 vaccine a timeout
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Johnson & Johnson and Moderna Inc. 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.

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The Ramsay Health Care Limited (ASX: RHC) share price is pushing higher on Wednesday morning.

At the time of writing, the private hospital operator’s shares are up almost 1% to $67.99.

Why is the Ramsay share price rising?

Investors have been buying Ramsay’s shares today following speculation that it is looking to make a major acquisition in the Australian healthcare market.

On Tuesday evevning, the AFR was reporting that Ramsay is teaming up with private equity firm Pacific Equity Partners to acquire rival private hospital operator Healthe Care.

Healthe Care is the third largest private hospital operator in Australia. It employs 7,000 people across Australia and in New Zealand and operates a portfolio of 34 private healthcare facilities.

However, while Ramsay and Pacific Equity Partners are believed to be teaming up on the acquisition, they are not expected to own the hospitals together.

Instead, it is understood that Ramsay will acquire as much of Healthe Care’s portfolio as the ACCC allows, with Pacific Equity Partners snapping up the rest of the hospitals.

Surprisingly, Ramsay has not responded to the report. However, the speculation does make a lot of sense given that Healthe Care’s owner, China’s Luye Medical Group, is currently in the process of offloading these assets.

The report indicates that Luye Medical Group hired JPMorgan to auction them off, with the first round bids being made last week. Sources have told the media outlet that the auction will now move to a second and binding bid phase in coming weeks.

Healthe Care is estimated to be generating approximately $1 billion in revenue per year at present. Depending on how many of its operations Ramsay acquires, it has the potential to give its Australian revenues a nice lift in FY 2022 and beyond. Ramsay recorded revenue of $2.7 billion in Australia during the first half of FY 2021.

More reading

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Lithium Australia NL (ASX: LIT) shares are on the move after the company released a positive update this morning. In early trade, the Lithium Australia share price is soaring 6.82% higher to 11.75 cents.

In today’s update, the company shared that its subsidiary, VSPC Ltd, has received encouraging results and can potentially commercialise its lithium ferro phosphate (LFP) products.

Let’s look closer at today’s news out of Lithium Australia.

What’s driving the Lithium Australia share price?

The Lithium Australia share price has bolted out of the gate this morning after the company advised a pre-feasibility study found VSPC’s LFP cathode powders to be of superior quality and performance than most other products available.

The study also gave VSPC information on the costs and benefits to begin commercially manufacturing its LFP cathode power.

Lithium Australia said steps towards the production of LFP cathode powder will likely begin shortly. It has a goal of producing 10,000 tonnes per year by 2026.

The study also found the most economically sound location to produce the product is in India. Although, the company is still contemplating other up and downstream opportunities that may exist if it is produced in Australia, the United States, South Korea or Europe.

Producing LFP cathode powder in India could see the company with earnings before interest, tax, depreciation and amortisation (EBITDA) of US$66 million a year, as well as a free cash flow of US$56 million per year. The plant itself would cost US$113 million and take two years to build.

Next, Lithium Australia will conduct a feasibility study and a business case review for basing the plant in India. It will also conduct a life cycle assessment analysis of the project to determine its carbon footprint and sustainability.

Is LFP the future of lithium technology?

In today’s release, Lithium Australia stated it believes LFP is set to become the dominant lithium-ion chemistry in China over the next few years. It expects this trend will become global, in which case VSPC is in a position to supply the market with little competition.

Lithium Australia said only 2% of LFP cathode products are produced outside of China. Due to China’s own electric vehicle (EV) industry, EV manufacturers in other nations, Europe and the US in particular, may seek out locally produced LFP cathode powders.

Volkswagen has recently announced its entry-level EVs will be powered by LFP. Lithium Australia hopes other EV manufactures will follow suit.

The company also noted that potential demand for LFP may come from creators of battery energy storage systems.

Commentary from management

Lithium Australia managing director Adrian Griffin said the pre-feasibility study demonstrated VSPC is able to produce some of the most advanced LFP cathode powders available. He said:

These major milestones have been achieved in an environment in which the largest electric vehicle producers are moving to incorporate LFP lithium-ion batteries into entry-level vehicles, due to their superior safety, lower cost, longer life and reduced exposure to conflict metals. These LFP attributes are also expanding its utilisation in stationary energy-storage applications. Indeed, major battery producers worldwide are racing to expand their LFP production to meet demand as LFP becomes the fastest growing sector of the battery industry.

At present there is little LFP production outside of China, with original equipment manufacturers striving to secure alternative supply chains. Lithium Australia and VSPC aim to provide that supply chain security.

Lithium Australia share price snapshot

The Lithium Australia share price has been soaring on the ASX lately and today’s news has provided a further boost.

As is the case for many ASX listed lithium producers, Lithium Australia shares have boomed in 2021. They are currently up by almost 96% year to date. The Lithium Australia share price is also up by 135% over the last 12 months.

The company has a market capitalisation of around $98 million, with approximately 897 million shares outstanding.

More reading

• Ramsay (ASX:RHC) share price rises on acquisition speculation
• Could this help the Zip (ASX:Z1P) share price catch up to Afterpay?
• Why the Woodside (ASX:WPL) share price is edging lower today
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• Why the BrainChip (ASX:BRN) share price is rocketing 27% higher today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 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.

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The Zip Co Ltd (ASX: Z1P) share price surged on Tuesday after the company announced yet another solid quarterly update. At the time of writing, the Zip share price is trading for $10.56, up 8.53%.

Investors turned their attention as to whether or not rising competition in the buy now pay later sector would impact near-term growth. And if Zip could continue to capitalise on the significant United States retail and e-commerce market. 

Off to the races with the Zip share price 

The Zip shares opened a solid 4.5% higher on Tuesday. However, this was just the beginning of its bullish intraday run. Unrelenting buying momentum throughout the day pushed its shares an eye-watering 16.95% higher by close. 

It is apparent that the market is pleased with the quarterly results. The company delivered an 80%, 195%, and 114% increase in revenue, transaction numbers, and transaction volume respectively on the prior corresponding period. 

Perhaps more importantly, the company’s US-based QuadPay business continued to gain momentum. Transaction volumes grew 234% to $762 million and active customers growing 153% to 3.8 million. This also translated to a 188% increase in revenue to $54.4 million, or a record 47.55% contribution to group revenue. 

Zip takes aim at greater international exposure

Afterpay has always led the buy now pay later (BNPL) sector in terms of international exposure. It was one of the first ASX-listed BNPL shares to begin operations in the US and UK. Additionally, it took the initiative to acquire Pagantis to access Europe and furthermore establish a base in Singapore.

More recently, the company successfully obtained the go-ahead from the Bank of Spain, going live with merchants in France, Spain, and Italy with additional access to Germany and Portugal. 

Zip has lifted its international efforts following a $120 million capital raising back in late December 2020. This capital raising established a “New Markets” division for the business to lead the active pursuit of global growth opportunities. 

The division hit the ground running with an investment in Spotii, a leading BNPL focused on the Gulf Cooperation Council region. In addition to Twisto, a leading payments platform operational in Czechia and Poland. 

In Tuesday’s quarterly update, the New Markets division continued to expand its global footprint across both the developed and developing world. This included a soft launch in Canada, driven by its US merchant demand, a strategic investment into South East Asia via TendoPay in Philippines, and a follow-on investment into Twisto. 

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• 2 outstanding ASX tech shares to buy
• What’s lifting the Afterpay (ASX:APT) share price today?
• Afterpay and Zip were among the most traded ASX shares last week

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Woodside Petroleum Limited (ASX: WPL) share price is under pressure on Wednesday.

In morning trade, the energy producer’s shares are down 1% to $24.06.

Why is the Woodside share price edging lower?

After the market close on Tuesday, Woodside provided an update on its CEO succession.

According to the release, the Woodside Board and its CEO, Peter Coleman, have agreed that Mr Coleman will retire from the role on 3 June 2021.

This follows an announcement in December stating Mr Coleman’s intention to retire from Woodside in 2021, by which time he will have served ten years in the role of CEO.

What now?

Replacing Mr Coleman on an acting basis will be Woodside’s Executive Vice President Development and Marketing, Meg O’Neill. She will commence in the role next week on 20 April.

Woodside’s Chairman, Richard Goyder, commented: “Peter has been an outstanding CEO, creating a resilient and future-focused organisation. “Throughout his time at the helm of Woodside, Peter has demonstrated a commitment to promoting inclusion and diversity, operational excellence, a safe workplace, prudent capital management and maintenance of a strong balance sheet.”

Mr Goyder spoke very positively about the appointment of Meg O’Neill as Acting CEO.

He said: “The Board is very pleased to announce the appointment of Meg O’Neill as Acting CEO. Meg has demonstrated that she is an extremely capable executive, underpinned by her extensive experience and track record in the global energy sector.”

The company advised that its internal and external search for Woodside’s next permanent CEO is progressing.

However, one person that won’t be taking the role is Santos Ltd (ASX: STO) CEO, Kevin Gallagher. Earlier this week Santos gave him a one-off growth projects incentive to keep him in the role.

Oil price rise not enough

Mr Coleman’s exit appears to have offset news of a rise in oil prices overnight following the release of strong economic data out of China.

According to Bloomberg, the WTI crude oil price is up 1.2% to US$60.41 a barrel and the Brent crude oil price has risen 1% to US$63.91 a barrel.

More reading

• 5 things to watch on the ASX 200 on Wednesday
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• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

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The Telix Pharmaceuticals Ltd (ASX: TLX) share price is storming higher this morning.

At the time of writing, the clinical-stage biopharmaceutical company’s shares are up 5% to $4.24.

Why is the Telix share price rising?

Investors have been buying Telix shares this morning following the release of an update on its prostate cancer imaging product, Illuccix.

According to the release, the Australian Therapeutic Goods Administration (TGA) has accepted the company’s submission for the registration of Illuccix and has now commenced the priority evaluation process.

Under the priority registration pathway, the TGA will evaluate Telix’s submission to register Illuccix on the Australian Register of Therapeutic Goods (ARTG) with a target timeframe of 150 working days and an indicative decision date of 12 November 2021.

This means that the company now has regulatory reviews for Illuccix in progress in 17 countries globally. This includes Canada, the European Union, and the United States.

Management commentary

 Telix’s CEO, Dr. Christian Behrenbruch, said: “We are pleased that the TGA has accepted our submission for the registration of Illuccix and has now commenced the priority evaluation phase. This brings us significantly closer to our goal of providing widespread access to state-of-the-art prostate cancer imaging for Australian men living with prostate cancer.”

“Should we be successful in gaining TGA registration of Illuccix in Australia, we would also anticipate filing a New Medical Application with Medsafe in New Zealand under the abbreviated evaluation process for medicines approved by recognised overseas regulators. We are committed to providing access to Illuccix for all men living with prostate cancer, regardless of where they reside.”

There certainly is a need for this state-of-the-art technology. The release explains that prostate cancer was the most commonly diagnosed cancer in men in both Australia and New Zealand in 2020.

More than 85,000 Australian and New Zealand men were estimated to be living with prostate cancer last year.

More reading

• Why the BrainChip (ASX:BRN) share price is rocketing 27% higher today
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Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. 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.

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The BrainChip Holdings Ltd (ASX: BRN) share price is rocketing higher on Wednesday.

In early trade, the artificial intelligence (AI) technology company’s shares are up a massive 27% to 67.5 cents.

Why is the BrainChip share price rocketing higher?

Investors have been buying the company’s shares after it announced the start of volume manufacturing of its Akida AKD1000 neuromorphic processor chip for edge AI devices.

According to the release, the engineering layout for BrainChip’s high-performance, ultra-low power chip was designed in partnership with Socionext. It is a developer of advanced System-on-Chip (SoC) solutions.

Socionext then released the engineering layout of the production version of the AKD1000 chip to Taiwan Semiconductor Manufacturing Company, which has begun preparing to manufacture at volume.

What is Akida?

The company describes its Akida Neural Processor technology as a revolutionary advanced neural networking processor that brings AI to the edge in a way that existing technologies are not capable.

It notes that the solution is high-performance, small, ultra-low power and enables a wide array of edge capabilities.

It can be used in applications including Smart Home, Smart Health, Smart City and Smart Transportation. These applications include home automation and remote controls, industrial IoT, robotics, security cameras, sensors, unmanned aircraft, autonomous vehicles, medical instruments, object detection, sound detection, odor and taste detection, gesture control and cybersecurity.

BrainChip’s CEO, Peter van der Made, commented: “I am grateful to our engineering team, who worked hard over the past eight months to release the Akida technology for volume production, and to our EAP customers that have helped lead us to market readiness.”

“This move to manufacturing is a major milestone for BrainChip and for the industry at large as the first realistic opportunity to bring AI processing capability to edge devices for learning, enabling personalization of products without the need for retraining,” he concluded.

More reading

• Airtasker and Zip were among the most traded ASX shares last week
• Why BrainChip, Crown, Qantas, & Quickstep shares are tumbling lower
• BrainChip (ASX:BRN) share price sinks on shock CEO exit
• ASX quarterly rebalance: HUB24 joins ASX 200, Brainchip into ASX 300

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

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The AMP Limited (ASX: AMP) share price has had a tough start to the year. Shares in the Aussie financial services group have slumped 20.5% amid hitting a new 52-week low at Tuesday’s close.

Why is the AMP share price falling?

AMP has been in the news a lot as of late. Last year, major US private equity group, Ares Management confirmed its interest in acquiring 100% of AMP shares. That came in the form of an indicative, non-binding, conditional proposal in November. 

Ultimately, however, that $6 billion takeover deal fell through when Ares withdrew in February. AMP has since been working on a $1.35 billion sale of 60% of its AMP Capital unlisted markets business. The AMP Capital business is one of the most profitable arms under the AMP brand.

AMP will retain a 40% stake in the private markets business under the proposed joint venture with Ares. The deal also follows the sale of AMP Life for $3 billion to Resolution Life in July 2020 to leave a slimmed-down financial services group.

The AMP share price is under pressure as negotiations continue. Many investors have sold down, pushing the company’s share price to $1.24 per share at yesterday’s close. Well below Ares’ takeover offer of $1.85 per share.

There have also been leadership changes at the Aussie company. AMP CEO Francesco de Ferrari announced his retirement in late March 2021. He is set to be replaced by former Australia and New Zealand Banking Group Ltd (ASX: ANZ) deputy CEO, Alexis George.

The AMP share price has continued to slide to its current level amid the changes. It comes after Mr. De Ferrari was installed to right the ship after a scandal-plagued period highlighted by the 2018 Financial Services Royal Commission.

Foolish takeaway

The AMP share price remains under pressure in 2021 amid many operational and leadership changes at the group. Shares in the Aussie trading group fell lower on Tuesday to hit a new 52-week low of $1.24 per share at the market close.

Shares in the Aussie financial services group are underperforming the S&P/ASX 200 Index (ASX: XJO) by 24.9% so far this calendar year.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• Why ASX 200 tech shares are vital to manufacturers’ reshoring plans
• ASX 200 flat: Zip rockets, Cleanaway higher, Regis-IGO announce Tropicana deal
• The Orocobre (ASX:ORE) share price is climbing. Here’s why.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. 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.

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There a few S&P/ASX 200 Index (ASX: XJO) blue chip shares that could be worthy of your attention.

Businesses that have strong competitive advantages and keep investing in their product have a good chance of producing solid long-term returns.

These two may be among the best in the ASX 200:

Xero Limited (ASX: XRO)

Xero is one of the largest technology businesses on the ASX.

It offers small and medium businesses online accounting software which is presented in an easy-to-understand way. It also has plenty of useful tools to help do the accounting work quicker and give the business owner and financial adviser greater insights into how the business is performing.

This offering is proving popular all over the world. Xero is building a global subscriber base in countries like Australia, the UK and the USA. At the latest count, Xero had 2.45 million subscribers at 30 September 2020 – an increase of 19% from the prior corresponding period.

Xero invests heavily for the long-term and addressing customer needs. In the FY21 half-year period it invested $140 million, which was up 29% compared to the prior corresponding period and significantly more than the operating revenue growth of 21%.

It’s a powerful combination with Xero’s gross profit margin of close to 86%. That’s very high for an ASX 200 blue chip share.

Xero CEO Steve Vamos said about the HY21 result:

This result demonstrates the value our customers attribute to their Xero subscription and the underlying strength of Xero’s business model. We continue to prioritise investment in customer growth and product development in line with the long term opportunity we see.

Altium Limited (ASX: ALU)

Altium is another of the leading technology businesses. It wants to be the world-leading provider of electronic PCB software.

It’s trying to achieve that with its Altium 365 product, which is an online cloud offering which allows engineers to collaborate on projects.

This is the world’s first digital platform for design and realisation of electronics hardware and it’s gaining strong early adoption.

Altium 365 will also give the company the opportunity to generate revenue through different models. The company could generate transaction fees on manufacturing (like the Airbnb model) and there’s also the opportunity for premium services (like Amazon Prime).

When Altium reported its FY21 half-year result, it said that Altium 365 had 9,300 active users (up 83%) and over 4,400 active accounts (up 69%).

Over the next few years, the ASX 200 blue chip share is targeting 100,000 active subscribers to compel key industry stakeholders to support its agenda to transform electronic design and its realisation.

It’s aiming to reach US$500 million of revenue by 2025 and this should translate into materially higher profit margins, which will help grow the bottom profit line faster than the revenue.

More reading

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• How you can become rich buying and holding ASX shares
• Leading brokers name 3 ASX shares to buy today
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• Why the Xero (ASX:XRO) share price can go even higher from here

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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