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ALU

Altium Ltd Crashes Over 15 Per Cent, Half-Year Results Miss Consensus Expectations

Tumul Sinha

Tumul is an experienced Equity Analyst with ASR Wealth Advisers. She holds a Master’s Degree in Finance from the University of Sydney. Her key industry verticals include Real Estate, Health Care and Technology.

Altium Limited (ASX: ALU) released its results for the half year ending 31 December 2019, yesterday after market close. The business reported revenue of $92.8m and EBITDA of $36.8m – representing an EBITDA margin of 39.7%. This represents a miss on analyst expectations. The market reacted as expected, with the stock selling off heavily early in today’s session, trading as low as $36 per share, representing a 15% fall from yesterday’s closing price.

 

ALTIUM

Altium Limited (ASX: ALU) has crashed over 15% today after missing consensus expectations with its half year results, which were announced yesterday after market close. (Credit: Yahoo Finance).

 

Business segment Octopart was negatively impacted by the reduced volume in the parts distribution industry due to excess inventory and lower traffic to distributors. This segment was further impacted by changes to the Google search algorithm (which has now been rectified). The business has stated its full-year revenue will be in the bottom end of the guided range of $205-215m and EBITDA margin within the range 37%-38%.

While this half has been disappointing for Altium, the business and investors alike see upside from Altium 365. 365-PRO and the Embedded Viewer were launched in October and December, respectively – with Basic and Standard to be released in April 2020. This may create a wave of software upgrades and/or cross-selling as the business leverages the existing user-base, particularly in the China region.

The business has attributed a potential second half slowdown due to coronavirus, however it is possible that this is merely a near term headwind and that the current sell off and respective share price weakness may pose a buying opportunity for value investors who still have confidence in the business’s fundamentals.

 


Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

 

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