The Altium Limited (ASX: ALU) share price will be one to watch closely this earnings season.
After a couple of years of modest growth during the pandemic, the electronic design software company is expecting to return to double-digit growth in FY 2022.
What is expected from Altium in FY 2022?
When the company released its half-year results in February, management provided revenue and earnings guidance for the full year.
It advised that it expects to achieve the following:
- Revenue of US$213 million to US$217 million, representing 18% to 20% growth
- Annualised recurring revenue (ARR) growth of 23% to 27%.
- Underlying EBITDA margin of 34% to 36%
Management also suggested that it was likely to hit the high end of its revenue guidance and the low end of its EBITDA guidance.
This would suggest revenue of US$217 million and underlying EBITDA of US$73.8 million.
What are analysts saying?
The good news is that analysts at Bell Potter appear confident the company will achieve its targets.
It recently commented:
Altium has undertaken various marketing initiatives this quarter which, while slightly different to years gone by, suggests the company is again targeting subscriber over revenue growth in H2. This is worth highlighting as Altium has provided both revenue and EBITDA margin guidance for FY22 – US$213-217m and lower end of 34-36% – so there is the potential that these initiatives put at least the revenue guidance at some risk. We do not, however, believe this is the case.
Is the Altium share price good value?
Bell Potter sees value in the Altium share price even after its recent recovery. Its analysts currently have a buy rating and $34.00 price target on its shares.
This implies potential upside of 11% for investors over the next 12 months from current levels.
