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

Tim Montague-Jones

Tim Montague-Jones has over 20 year investment management experience working in the financial markets. Previous experience includes a ten year stint at Morningstar as a Senior Equity Analyst/Portfolio Manager, founding the Morningstar Growth Portfolio and a founding member of their Investment Committee. Tim was also a Senior Equity Analyst for Macquarie Group and a member of the winning team to obtain the 2016 LONSEC Fund Manager of the Year award.

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 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.



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).

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ASR has no position in any of the stocks mentioned.


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