Last Updated: 10 Nov 2024
Executive Summary
Altair Engineering Inc. (ALTR) is a software and cloud solutions provider in the areas of simulation, high-performance computing, data analysis, and artificial intelligence. Despite a challenging operating environment, the company has demonstrated resilience and growth potential. With a strong market position, innovative offerings, and a focus on customer success, Altair is well-positioned to capitalize on long-term industry trends.
Company Overview
Altair Engineering Inc. was founded in 1985 and is headquartered in Troy, Michigan. The company serves a global customer base across various industries, including aerospace, automotive, electronics, and healthcare. Altair's software and cloud solutions enable customers to design, simulate, and optimize their products and processes, leading to improved efficiency, reduced costs, and accelerated innovation.
Fundamental Analysis
Revenue: Altair's revenue has grown steadily in recent years, reaching $644.7 million in the trailing twelve months (TTM). The company's quarterly revenue growth of 13% year-over-year indicates continued momentum.
Earnings: Diluted EPS for the TTM is $0.40, reflecting a significant increase of 63.3% year-over-year. This growth is driven by strong demand for Altair's software and cloud solutions.
Profitability: Altair's profit margin is 5.1%, while its operating margin is -2.85%. The company's profitability metrics are expected to improve as it scales its operations and optimizes its cost structure.
Valuation: Altair's current market capitalization is $8.8 billion. The stock is trading at a trailing PE ratio of 259.12 and a forward PE ratio of 74.07. These valuations reflect the company's growth potential and market premium.
Technical Analysis
Price Action: Altair's stock price has been trending higher in recent months, recently reaching a 52-week high of $113.12. The stock is currently trading at $103.65, above its 50-day and 200-day moving averages.
Support and Resistance: Key support levels for Altair lie at $95 and $85, while resistance levels are at $108 and $115.
Momentum Indicators: The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators suggest that Altair's stock is in an uptrend with positive momentum.
Short Term Outlook
In the short term, Altair's stock is expected to continue its upward trend. The company's strong fundamentals, positive analyst sentiment, and favorable technical indicators support this view. However, investors should be aware of potential market volatility and the impact of macroeconomic factors.
Long Term Outlook
Over the long term, Altair is well-positioned to benefit from the growing demand for software and cloud solutions in the engineering and scientific industries. The company's innovative offerings, customer-centric approach, and global reach provide a solid foundation for sustained growth.
Analyst Recommendations
Analysts have a bullish outlook on Altair Engineering Inc. Out of 11 analysts covering the stock, 3 have a Strong Buy rating, 3 have a Buy rating, 4 have a Hold rating, and 1 has a Sell rating. The average analyst target price is $108.53, implying an upside potential of approximately 4.7% from the current price.
