Here’s why Altium Limited has jumped 4% today

Altium Limited (ASX:ALU) shares have stacked on strong gains recently.

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Shares of Altium Limited (ASX: ALU) have risen 4% to $4.44 today after Bell Potter raised its target price by 11% to $5.00 this morning. The stock has an all-time high price of $4.50 and maintains a market capitalisation of nearly $500 million.

Altium provides software for designing printed circuit boards (PCBs) which help power everyday electronic devices such as televisions, cars and toasters. As is the case with most software companies, Altium is capital light meaning that there is very little cost involved when new customers are added.

The company demonstrated its fantastic growth potential in its most recent earnings report for the half-year ended 31 December. Earnings before interest and tax (EBIT) rose 84% to $9.6 million, revenues jumped 17% to $37.8 million, while net profit after tax (NPAT) more than doubled to $6.8 million. Meanwhile, three new products are expected to drive profitability from the 2016 financial year onwards.

One more thing: each of those figures mentioned above are measured in US dollars. That means that Australian shareholders will also benefit as the local dollar weakens, which it is expected to do over the coming years.

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Motley Fool contributor Ryan Newman and The Motley Fool own shares in Altium Limited. You can follow Ryan on Twitter @ASXvalueinvest. The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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