The Altium Limited (ASX: ALU) share price has been one of the hottest growth shares on the ASX in recent years.
Shares in the Aussie tech stock are up nearly 1,200% in the last 5 years, from $3.00 to $38.94 per share at the time of writing. But such astronomical growth always begs the question of whether there's still value left in hot stocks like Altium or Afterpay Ltd (ASX: APT).
So, should you be buying Altium shares before the release of its results on 17 February?
Why the Altium share price has rocketed higher
The Aussie software group is part of the WAAAX consortium, a group of ASX 200 tech stocks that have all seen their share prices rocket higher.
Altium is a software group that provides PC-based electronics design software for engineers who design printed circuits boards. One key advantage is that Altium's business model is highly scalable and represents a "capital-light" business model.
Altium shares have rocketed higher as the company continues to achieve this scale that it is after. However, it isn't done yet and is targeting 40% market share by 2025.
Outperforming earnings and a strong operational expansion have been the keys to Altium's success in recent years.
The tech group grew revenue by 22.6% in FY19 and posted a 39.8% increase in earnings before interest, tax, depreciation and amortisation. Net profit after tax jumped 41.1% to US$52.9 million as Altium shares climbed higher in August.
The Altium Designer product continues to be the bedrock of Altium's success with a 22% increase in software license revenue.
Should you buy Altium before February?
Altium is set to announce its half-year results on 17 February after the market close. I'd be keeping a close eye on Altium shares in the next couple of weeks before results.
Given the recent growth profile, I'm expecting another bumper result from the Aussie tech group.
However, given what we saw with Nearmap Ltd (ASX: NEA) this morning, it could get messy if Altium misses its targets.
Now could be a good time to buy Altium shares if the company posts another solid result. That could see the stock surge past the $40 per share barrier to a new record high.
