The Altium Limited (ASX: ALU) share price has been an impressive performer again in 2019.
Since the start of the year the design software provider's shares have gained a massive 65%.
Why is the Altium share price up 65% this year?
Investors have been buying the market darling's shares this year following another stellar performance in FY 2019.
For the 12 months ended June 30, Altium posted a 22.6% increase in full year revenue to US$171.8 million and an EBITDA margin of 36.5%.
This led to Altium posting a 39.8% increase in EBITDA to US$62.7 million and a 41.1% lift in net profit after tax to US$52.9 million.
This was driven by its Altium Designer product which recorded a 22% lift in software license revenue to US$62.4 million. Demand for the printed circuit board (PCB) design software continues to grow thanks to the proliferation of the Internet of Things market.
Pleasingly, management expects this strong form to continue. It recently provided FY 2020 revenue guidance of US$205 million to US$215 million and an EBITDA margin of 37% to 38%.
It also reiterated its aim of growing its revenue to US$500 million by FY 2025.
Goldman Sachs initiates coverage.
Its recent update caught the eye of analysts at Goldman Sachs.
Its analysts note that Altium is evolving from a PCB design software provider to an integrated software platform for managing the design, procurement and manufacturing of PCBs.
It believes the company's "market position, growth outlook, strong returns and net cash position are key strengths."
However, the broker believes that Altium's shares are fully valued at present. As a result, they have initiated coverage on its shares with a neutral rating and $33.55 price target.
Goldman said: "While we are attracted to the market position and medium-to-long term outlook for ALU, our 12-month target price of A$33.55 based on a blended EV/EBIT, DCF and M&A valuation implies -6% return. Accordingly, we initiate with a Neutral rating."
