Altium (ASX:ALU) share price down 12% after earnings report

Altium shares are facing selling pressures today from a mixed FY21 performance.

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The Altium Ltd (ASX: ALU) share price has sunk into the red during afternoon trade on Monday.

Shares in the software company are on the decline as the company reported its FY21 earnings with mixed results.

Let’s investigate further.

How did Altium perform in FY21?

Altium grew its total revenue by just 1% year on year to US$191 million. Excluding the divested TASKING business, revenue actually climbed 6% from the year prior.

In terms of the revenue split, board and systems revenue gained 2% over the year, whereas the company’s Octopart segment revenue increased by 42% to US$27 million.

Conversely, Altium’s manufacturing revenue came in 7% behind FY20 at just US$2.4 million.

Altium’s recurring revenue also increased as a percentage of overall revenue, comprising 65% of total sales versus 59% the year prior.

Despite the revenue growth, the company’s profit before tax declined 7% year on year to US$48 million. Altium explained this was from its operating costs increasing at a faster rate than sales revenue. Its FY21 EBITDA also decreased by 3% from the year prior.

Even still, net profit after tax (NPAT) came in at US$35 million, which signifies around an 80% increase from FY20.

Altium’s management foresees a period of growth for FY22. In what should be a positive for the Altium share price, the company has upgraded guidance for FY22 and estimates revenue of between US$209 million to US$217 million for the year. This calls for 16% to 20% sales growth from FY21.

The company also forecasts that annual recurring revenue will increase a further 23%-27% over the next year.

Despite the seemingly robust performance, investors are selling Altium shares from the open on Monday.

At the time of writing, Altium shares have clawed back some ground and are now exchanging hands at $31.02, still an 11% drop into the red.

Altium share price snapshot

The Altium share price has struggled this year to date, posting a loss of 11% since January 1. This extends the loss over the previous 12 months to almost 16%.

Both of these results have lagged the S&P/ASX 200 index (ASX: XJO)’s return of about 25% over the past year.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium. The Motley Fool Australia owns shares of and has recommended Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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