Having held Altium for a few years since $0.86 I recently brought more on this pull back. Whilst it looks expensive on todays metrics, it looks cheap on a long term basis out to 2025. In their recent presentation they have a target to grow lisences from around 38k to 100k. In dollar terms this should equate to revenue in the vacinity of USD500m to USD600m. This could be conservative now that they are getting traction in the higher end PCB space having recently taken a major customer off Mentor Graphics. In profit terms if their strategy comes off it should equate to profits of around AUD 250m and a share price 3 times higher than todays if you assume they can maintain a high multiple.
I have confidence in Altium achieving their long term 2025 target as they significantly beat their 100m target, achieving 110m and are looking to achieve around 220m by 2020 extrapolating current growth. Management are excepetional and whilst these growth figures look ambitious they always manage to beat them.
Altium have also made strategic acquisitions focused on increasing their moat rather than just buying earnings, which sets them apart from their competition.
I am expecting very similar earnings growth to COH over the last 5 years and a similar multiple. COH has been a 4 bagger in that time and ALU could do the same. Very different businesses but both extremely high quality with exceptional management.