It's quite rare that the Altium Limited (ASX: ALU) share price is among the worst performers on the S&P/ASX 200 Index (ASX: XJO).
It is even rarer for the electronic design software company's shares to be the worst performer on the index.
But that is the case on Monday, with the Altium share price down over 8% to $33.31 in afternoon trade. At one stage its shares were down almost 13% today.
Why is the Altium share price sinking lower?
Investors have been selling the company's shares after it released a disappointing trading update.
Despite the company launching attractive pricing and extended payment terms during the pandemic, it hasn't been enough to offset the tough market conditions it is facing.
And although the company expects to deliver "solid" sales growth in FY 2020, it will fall short of the consensus estimate of US$192.5 million.
This is because traditionally Altium closes a significant amount of its second half business in the final two weeks of June. But with increased COVID-19 infection rates in the United States and a recent lockdown in Beijing, this won't be the case this year.
Is this a buying opportunity?
While today's share price decline is disappointing, I think it has created a buying opportunity for investors that are looking to make a long term investment.
I'm confident that Altium's underperformance this year is strictly pandemic-related and expect it to bounce back once the crisis passes.
Overall, I believe that industry tailwinds remain very supportive of its long term growth and expect it to achieve its 100,000 subscribers target by FY 2025.
Combined with its other promising businesses, such as Octopart and NEXUS, I expect Altium to grow its earnings at an above-average rate for many years to come. This could make it a market-beater over the 2020s.
