Why is the Altium Limited (ASX:ALU) share price sinking 16% this year?

Altium is one ASX technology share having a tough start to 2021

| More on:
Side-on view of a devastated male investor laying his head on his laptop keyboard

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Altium share price has dived 16% so far this year
  • The All Technology Index and Nasdaq have also dropped dramatically
  • The company will reveal its half year results on February 21

The Altium Ltd (ASX: ALU) share price has collapsed more than 16% this year to date despite a stellar 2021.

At the time of writing, the software company’s shares are holding their own on Monday, trading at $38.00 apiece, a 0.5% increase on their opening price.

Let’s take a look at what may be impacting the Altium share price in January.

Technology share woes

Altium shares have been on a steady decline so far this year. This follows a healthy 33% gain in the company’s share price in the 2021 calendar year.

Altium is a global software company headquartered in California with several offices throughout the world, including in Sydney.

The performance of the company’s share price has largely fallen in line with the NASDAQ-100 (NASDAQ: NDXT) technology index, down 14% this year to date, and the S&P/ASX All Technology Index (ASX: XTX), down 12.6% in January.

Meanwhile, fellow ASX technology share Xero Limited (ASX: XRO) has sunk 17.85% and Appen Ltd (ASX: APX) has dropped 10.89%.

Tech shares have battled to gain a foothold on rare bright spots so far this year. On January 12, Altium’s share price gained 1.69%. This followed a 1.1% gain on Wall Street that had a positive impact on Aussie tech shares on the day. The company’s shares also gained 2.17% between market close on 14 and 18 January.

Brokers have also given the company mixed outlooks this month. Jeffries has a buy rating and a $48.83 price target on Altium, as my Foolish colleague James reported on Friday. That’s about 29% more than the current share price at the time of writing. However, Citi and Macquarie have predicted the company’s shares could decline this year.

Looking ahead, the company will announce its half-year results on 21 February. In November, Altium CEO Aram Mirkazemi expressed optimism the company could achieve its FY2022 guidance of 16-20% revenue growth.

Altium share price snapshot

The Altium share price has fallen 4.4% in a week and more than 13% in the past month. However, in the past year, the company’s shares have risen around 30%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 5% in the past year.

Altium commands a market capitalisation of around $4.9 billion based on its current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Altium, Appen Ltd, and Xero. The Motley Fool Australia owns and has recommended Appen Ltd and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Technology Shares

The Block share price plummeted 28% in June. Here’s why

The BNPL player's share price suffered amid broader market shifts in June.

Read more »

Two miners wearing hard hats standing at a mining site in front of a laptop computer
Technology Shares

RPMGlobal share price strengthens 5% on software sales improvement

The tech company's shares are flying higher on Monday.

Read more »

Kid with a brown paper bag on his head which has a sad face on it sits in front of an old style computer representing falling ASX 200 tech shares today.
Technology Shares

Why did the Novonix share price slide nearly 36% in June?

Tech shares continue to take a beating in 2022.

Read more »

Green arrow going up on stock market chart, symbolising a rising share price.
Technology Shares

Why is the Block share price racing 5% higher?

This ASX tech share is racing higher on Monday...

Read more »

Happy woman looking through two doughnuts like binoculars
Technology Shares

Should investors zero in on the Xero share price in July?

Is this ASX tech share now too cheap to ignore?

Read more »

A man in a suit face palms at the downturn happening with shares today.
Technology Shares

Why did the BrainChip share price crash 30% in June?

BrainChip's shares were sold off in June. Here's why...

Read more »

Man looks frustrated looking at computer screen in an office
Technology Shares

The Xero share price lost 14% last month. Here’s the tea

It's been a tough few weeks for the accounting software company.

Read more »

digital screen of bar chart representing asx tech shares
Technology Shares

Broker names 3 of the best ASX tech share to buy in FY23

These tech shares could be buys in FY 2023...

Read more »