Altium soars to a record high after booming half-year result
Software company Altium's shares soared to another record high on Tuesday morning after the company unveiled a booming half year result, led by strong growth in China, and unveiled an aspirational goal of $500 million in revenue by 2025.
The stock, which traded below 10¢ in 2011, soared more than 24 per cent to a high of $33.64 on Tuesday morning after the market absorbed the results announcement made the prior evening.
Altium, a software company specialising in the electronics design market, reported revenue growth of 24 per cent to $US78.1 million, and a 58 per cent increase in net profit to $US23.4 million.
Its profit margins increased from 30 per cent the prior first half to 36.3 per cent, and company chief executive Aram Mirkazemi said the company was on track to meet its target of $200 million in revenue by 2020 with a profit margin of 35 per cent or more.
"Revenue growth of 24 per cent and an EBITDA margin of 36.3 per cent demonstrate the power of momentum in our business and our commitment to consistent and sustainable growth over the long term," Mr Mirkazemi said.
"Altium is focused on achieving PCB (printed circuit board) market leadership by 2020 and market dominance by 2025."
The Altium board declared an unfranked 16¢ per share dividend for the first half.
Revenue growth of 49 per cent in China was touted as one of the highlights from the result.
"China has long been an issue for the business due to high levels of piracy," wrote Ben Clark from TMS Capital after the result. TMS is an Altium investor.
According to Mr Clark, less than 4 per cent of the company's stock is owned by active fund managers highlighting the divisiveness of the company's high earnings multiples. "Few can bring themselves to pay the high earnings multiple the company has consistently traded on."
Altium is now valued at more than $4 billion which means it is valued at more than 20 times its 2020 revenue target of $200 million.