Added 9 months ago
#Bull Case

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. 

Added 5 months ago
#HY2019 Results

Half year FY 19 was an amazing result. If they achieve their USD 500M target by 2025 with 40% EBITDA then this is going to $60+. I sold a third of my portfolio today but will add to my position if there is a market sell down. The rest I have held now for over 5 years and  have no intention of selling. There is a huge future for ALU if they can get market dominance, this company has the potential to be multiples of its current size. Not cheap on todays numbers, but an outstanding business with incredible management. 

Last edited 5 months ago
#HY2019 Results


Revenue growth of 24% to US$78.1m. Well and truly on track to achieve (and beat) long held 2020 target of US$200m in revenue.

Even better, EBITDA margin was 36.7%, ahead of 35% target. 

Net profit up a massive 58%.

Name any of their key metrics -- they ALL moved in the right direction. Of particular note was China, which saw a 49% lift in revenue (there's a lot of potential remaining here too).

Of course, still debt free with US$58m in cash.

Company has provided an aspiration goal of US$500m in revenue by 2025 and believes the EBITDA margin could expand to 40%. That would represent top line growth of 20% per annum between FY18 and FY19.

On that goal, EBITDA would grow by ~24% per annum between FY18 and FY25

Valuation is the hard part here. Using trailing twelve months (TTM) figures and an US/AUD exchange rate of 72c:

P/S ~20, EV/EBITDA ~54, PE ~67

To put that in context, Alphabet (Google), which is also growing top line at ~20%, trades on a PE of ~26 and a PS of 5.6. Altium is a fantastic tech company, but then again so is Google, right?

I have zero concerns about the quality and strength of the business. My worry is that unless shares can mainatin very high multiples, shareholders could see pretty ordinary returns from here. ALU is a $4.3b company, and it's not easy to maintain high and sustainted levels of growth at this scale. 

I have consistently under-estimated what the market will pay for this company. So be warned... 

Investor presentation can be found here

AFR article here

Last edited 4 months ago
#Bull Case

-Strong tailwind of increasing demand for electronic devices as they become ever more integrated into day to day life

-A critical component of devices are circuit boards 

-Need for a tool to design circuit boards

-Altimum's product is the solution

Added 3 months ago
#Bull Case

SP has rallied recently tracking the IT sector on the ASX - may have some pull back but should over the long term contiune to rise - Gotta jump in somewhere. 

Customers include but are not limited to those listed below

  • Automotive: i.e. Tesla, Ford, Volkswagen
  • Aerospace: i.e. Boeing, Lockheed Martin, SpaceX
  • Life Sciences: i.e. Cochlear, ResMed, Phillips n Mobile Devices: i.e. SAGEM, Honeywell
  • Consumer Electronics: Apple, Amazon, Fitbit, Bose
  • Electronics & High tech: Google, G.E.
  • Research & Education: John Hopkins, CSIRO n Industrial Controls: Siemens
  • Computers: Microsoft, Lenovo n Semi conductors: Qualcomm
Added 3 months ago
#Bull Case

An increblie company in terms of quality. Great growth metrics backed by a vision of being a market dominator by 2025. Stock has run up hard recently and may be considered expensive in some valuations, however this is a great example of willing to pay a premium price for a premium business.

Last edited 3 months ago
#live wire

no of shares 130M, forecasts: Net Profit in 2021 $85M, rev $260M, PE 44

SP=85 x 44 / 130 = $28.77  discount back 2 yrs at 10% = $23.77



Added 2 months ago
#Bull Case

Possiblilty of dominance due to world first position head start in ever-growing IOT market. 

Added one year ago

Have a long held target of US$200m in revenue by 2020 (reiterated as recently as HY18), with a 35% or better EBITDA margin.

Added 5 months ago

My fairly simplistic take on this Company is that it is moved by the fortunes of the chip and electronics manufacturing. Recently this group was set back by bottlenecks in Intel’s supply chain and by a change up in the architecture for AI and Big Data handling. The latest chips are yet to be fully exploited by the coding teams so ththat software will take some time to catch up.  

These things seem to have temporarily setback the group and may yet depress the outlook through early to mid 2019. On the flip side of this, the US chip manufacturers are now showing some increases following a terrible fourth quarter, so perhaps the market’s forward looking view is now past the worst. I am expecting that Altium will see increased sales after mid year unless a competitor emerges that could change the game. 

Right now the outlook for global growth is slowing. This one has at least a share of a secular trend which whilst it may have slowed for technology evolution to catch up, its outlook remains positive BUT is inevitably going to suffer from the increase in its profile and the number of analysts following what is now a well recognised name.

Added one year ago


This is the largest market for PCB software, and at present there is a huge number of users who are using pirated versions of the software. The company estimates around 100,000 companies are not paying.

Altium can now detect this and then encourage users to convert to paid subscriptions, and are expecting around 20% growth in this region.

Last edited 11 months ago

Renumeration reports looks to be a good combination of Short and Long Term Incentives tied to a combination of; revenue, EBITDA and EPS growth targets being met.

Key management is largely based in the US so the incentives are designed to retain and attract key personel in that market.

Key management personel own a total of 14,265,610 shares out of a total 130,284,942 on issue

- a little under 11% of the business.

I've often found it a positive when management interests are aligned with the shareholders.