Jarden believes acquisitions are required to achieve this, which may lead to a risk of overpaying to hit such targets. To achieve the company’s 2026 aspirational revenue target of $500m and 100,000 subscribers, it needs to achieve record net subscriptions. The broker reiterates its Underweight rating and awaits further evidence of take-up of Nexus and a return to an improvement in the margin expansion profile.
It’s thought strong share can be captured in the middle-market segment though the adoption of its high-end product, Nexus, will be challenged by strong competitors in Cadence and Mentor Graphics.
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The broker assesses the company's core PCB market size is $1.5bn and adoption is near full penetration. While Altium has a long track record of profitability, Jarden sees limits to its long-term growth compared with peers. Nexus returned to growth in the second half and Octopart’s revenue accelerated 63%, up from 19% in the first half. More positively, subscriptions rose 7% year-on-year and China rebounded strongly with 47% growth in the second half bringing full year growth to 11%. Management targets for US$500m in revenues and 100,000 subscribers are unchanged though have been pushed-out to 2026 from 2025, as they may be impacted by covid. The shift from perpetual licences negatively impacted full year revenue by -3%. There was also weaker top-line growth from the transition to term-based licenses. Then there is Nexus, a collaborative, cloud-enabled PCB design solution, while Octopart is an electronic parts search engine.įY21 underlying earnings of $62m were weaker than expected as investment increased in Cloud and Product development, and FY22 earnings margin guidance was lowered to 34%-36% from 36%-39%.
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The company is one of the largest providers globally of printed circuit board (PCB) design software and has an estimated market share of around 26%.Īltium develops software used for designing electronic products and has three key products including Altium Designer for the design of PCBs, which accounts for around 75% of group revenue. However, some brokers note the underlying business is intact and see any share price weakness after the result as a buying opportunity. Optics weren’t improved by an audit delay and a potential tax liability. Market confidence was dashed by a lack of near-term visibility after company guidance was missed, having been reiterated as recently as mid-June.
Having rejected a takeover offer by US technology giant Autodesk in June, valued at $5bn, Altium (( ALU)) produced FY21 results which saw its market capitalisation fall below $4bn. Forecast margin estimates have been lowered Discounted term-based licence offer to drag on ARPU Potential to monetise the non-paying user base While brokers reduce margin estimates, FY22 appears to have started well Altium released weaker than expected FY21 earnings While Altium’s strategic importance was underlined by the recent Autodesk bid, earnings visibility has been questioned after FY21 results missed recent guidance.