Altium Limited share price rockets up 26.71%

The Altium Limited (ASX: ALU) share price has risen by an astonishing 26.71% today in response to its report yesterday.

Its performance over the past five years is almost unmatched, with the share price growing from exactly $1 five years ago to today’s $18.88. Going further back, at one point in 2011 it was trading at $0.08.

The market had such a positive reaction to the Altium result because its growth was so impressive. Some of the numbers included revenue growth of 30% to US$63.2 million, earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 51% to US$19 million and net profit after tax (NPAT) growth of 51%.

All of the positive numbers resulted in earnings per share (EPS) growing by 50% and management increasing the dividend by 18% to AU$0.13 per share.

This result appears to just be one in a long line of impressive results and there could be more to come. Devices and machinery are just becoming more complex and require the technological input that Altium’s electronic PCB software provides.

In a world where the Internet of Things concept is only going to keep growing, Altium is well placed to benefit.

Indeed, management have predicted that it will reach US$200 million revenue by 2020 and also hit an EBITDA margin of at least 35%, after it reported the margin was 30% this time around.

Foolish takeaway

The share price growth today makes it hard to say that the current price is a buy, but I do expect that it could hit $20 by 2020, meaning it will likely beat the market over the next couple of years. The fast-growing dividend is also a bonus.

If you love growth shares but Altium is too expensive for you, you should check out these hot stocks instead.

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Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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