Software and cloud solutions company Altair Engineering Inc. (ALTR) held its annual investor day on May 27th and had its executive team layout multi-year targets, data for growth, and rebranding strategies. (See ALTR stock analysis on TipRanks)
Following the event, Kenneth Wong of Guggenheim Partners published a report providing details of the investor day updates. He explained that the company did not change its EBITDA margin growth targets from its 2019 Investor Day, but that the company expects to see those margins expand by 2023. Wong reiterated a Hold rating on the stock but did not assign a price target.
In the report, Wong stated that “Management maintained a cautiously optimistic stance as the company moves past the pandemic and expects software revenue to drive the majority of growth.”
The company’s total addressable market includes data analytics and AI, high-performance computing (HPC) and cloud, and simulation solutions.
With regards to growth, Wong added that the CEO of Altair noted that large future acquisitions would not dilute the EBITDA margin target and would only add to revenue expansion.
Altair also intends to rebrand itself as more of a cohesive umbrella corporation for its smaller subsidiaries, rather than a “house of brands.” The company wishes to be more inclusive of customers during corporate events, and increase brand awareness in general.
Consensus among analysts on TipRanks is a Moderate Buy based on 2 Buys and 3 Holds. The average analyst price target of $67.67 suggests that ALTR shares are fully priced at current levels.
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