The Altium Limited (ASX: ALU) share price is pushing higher on Monday morning.
At the time of writing, the electronic design software platform provider's shares are up 1% to $33.45.
Despite this and some strong recent gains, the Altium share price is still down 3% year to date.
Is the Altium share price in the buy zone?
This morning analysts at Bell Potter gave their verdict on the Altium share price.
According to the note, the broker has retained its hold rating and cut its price target by ~6.5% to $35.00.
Based on the current Altium share price, this implies modest upside of 4.5% over the next 12 months.
Bell Potter made the move in response to news that US software giant Autodesk has walked away from takeover talks.
What did the broker say?
Bell Potter commented: "With Autodesk walking away we have reduced the premium we apply in our relative valuations from 50% to 25%. The result is a 7% decrease in our PT to $35.00 which is <15% premium to the share price so we maintain our HOLD recommendation. We do not rule out further takeover interest in Altium though the lack of engagement by Altium with Autodesk suggests valuation will be an obstacle in the short to medium term."
Outside that, there are no changes to the broker's forecasts for Altium. It continues to forecast FY 2021 revenue and EBITDA close to the low end of Altium's guidance ranges for both. In addition, its analysts continue to forecast FY 2022 and FY 2023 revenue and EBITDA consistent with the guidance ranges in both years.
Bell Potter's estimates are for revenue of US$179.2 million in FY 2021, US$206.5 million in FY 2022, and then US$249.5 million in FY 2023. Whereas EBITDA is expected to be US$67.2 million, US$79 million, and US$97.9 million, respectively, over the same period.
And finally, for earnings per share, Bell Potter has pencilled in 32.2 US cents, 37.2 US cents, and 47.6 US cents between FY 2021 and FY 2023. This means the Altium share price is trading at 66x FY 2022 earnings and 51x FY 2023 earnings.
