Why did the Altium (ASX:ALU) share price gain 33% in a year?

Altium shares were on a high in 2021

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Key points

  • The Altium share price gained 33% in 2021
  • Altium rejected an offer from US software giant Autodesk in June
  • The technology company’s share price recovered from September to December

The Altium Ltd (ASX: ALU) share price had a stellar 2021 after a slow start to the year.  

The company’s share price soared from $33.99 to $45.19, a 32.95% gain. Altium outperformed the S&P/ASX 200 Index (ASX: XJO) by about 46%.

Let’s take a look at what has weighed on the Altium share price in 2021.

Ups and downs with a strong finish

The Altium share price had a sluggish start to the year before blasting ahead in June. The share price then had its ups and downs in the second half of 2021 but finished on a high.

In the first five months of the year, the Altium share price sank. Between market close on 31 December 2020 and 28 May, the shares in the tech company dived 17%.

In May, the Altium share price dropped 19% in the first two weeks — between market close on 30 April and14 May. This was in line with the S&P ASX All Technology Index (ASX: XTX), which fell 13.41% in the same time period.

However, in June the company’s shares changed direction, lifting 39% between market close on 4 June and 7 June alone.

Driving this massive uplift was news a takeover offer from US software giant Autodesk Inc (NASDAQ: ADSK) had been rejected at the $38.50 per share price. The company believed the proposal undervalued the company.

In August, Altium shares slumped again by 16.69% between 25 August and 30 August. This price shed appeared to be driven by investor reaction to the company’s FY21 earnings report. Altium’s revenue increased by 1%, but its profit before tax declined by 7%.

The Altium share price then gained 44.93% between market close on 9 September and 31 December. Investors reacted well to the company’s annual meeting update in November.

CEO Aram Mirkazemi expressed optimism the company was on track to achieve its FY 2022 guidance of 16-20% revenue growth. Altium was also rated as a “buy” by multiple brokers.

Share price snapshot

The Altium share price has fallen 9% in the past month and nearly 4% in the past week.

Year to date, the company’s shares have fallen roughly 12%. In comparison, the All Technology Index has also fallen 8% since the start of the year.

Altium has a market capitalisation of about $5.2 billion based on its current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Altium. The Motley Fool Australia has no position in any of the stocks mentioned. 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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