Altium Limited (ASX: ALU) is one of the most respected growth shares on the ASX.
It's an electronic PCB software business which allows engineers, from one-man setups to large teams, to design the products and machinery of the future.
Altium has a number of different services for various clients, such as Nexus, Altium 365, Upverter and Octopart.
Here are three reasons why Altium is very attractive as a growth share:
Aligned to a fast-growing industry
Altium could be one of the best ways to invest on the ASX in 'the future'. The Internet of Things should see demand rise for Altium's services.
Indeed, one of Altium's key points about its long-term outlook is that "the proliferation of electronics through the rise of smart connected devices continues to drive growth for our business in the foreseeable future."
Some of Altium's customers include Tesla, Google, Space X, NASA, Boeing, Lockheed Martin, CSIRO, Siemens, Microsoft, HP, Qualcomm, Broadcom, Apple, Amazon and Disney. You can see why Altium would indirectly benefit from this group of clients, as well as many others not listed here.
Big goals
Altium is now passing the goals that it set several years ago. Management have set even bigger goals for the company over the next six years.
Altium wants to achieve 100,000 Altium Designer subscribers before 2025 for market dominance and has committed itself to an aspirational revenue goal of $500 million in 2025.
If it achieves those goals it will likely have reached market-leading status. Altium has an aim of getting the whole design industry to support it in the goal of becoming number one in the way that Microsoft changed and dominated the Office tools.
Great financials
There are many financial aspects to like about Altium. It's building its cash balance, which could be used for acquisition opportunities. It has no debt. It is consistently growing its earnings before interest, tax, depreciation and amortisation (EBITDA) margin and its operating cashflow is growing rapidly too.
A bonus is that Altium is growing its dividend report after report, which is one of its main aims for shareholders.
Altium is a fine profit-making machine, it's not like some of those unprofitable tech companies we see at the moment.
Foolish takeaway
Altium is currently trading at 41x FY21's estimated earnings. This is, of course, not cheap by typical investing metrics. But I think that it's actually not too bad of a price considering Altium could actually beat expectations over the next six years and the low interest rate environment justifies higher share prices.
