Altair Engineering (ALTR) AI Stock Analysis

• Market Cap: $9.60B
• Dividend Yield: N/A
• Average Volume (3M): 772.68K
• Price to Earnings (P/E): 675.0
• Beta (1Y): 1.25
• Revenue Growth: 8.66%
• EPS Growth: N/A
• Country: US
• Employees: 3,500
• Sector: Technology
• Sector Strength: 62
• Industry: Software - Infrastructure
• EPS (TTM): 0.17
• Shares Outstanding: 40,473,000
• 10 Day Avg. Volume: 828,834
• 30 Day Avg. Volume: 772,680
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 14.40
• Price to Cash Flow (P/CF): 63.90
• P/FCF Ratio: 63.60
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 17.46
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $113.00
• Price Target Upside: 1.03% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

Altair Engineering benefits from strong financial performance and effective cash management, which supports a stable outlook. However, technical indicators suggest the stock is overbought, posing a risk of short-term correction. Furthermore, the valuation is unattractive with a very high P/E ratio, indicating potential overvaluation.

Positive Factors

Acquisition

The announced acquisition by Siemens for $113 per share in an all-cash deal is a good outcome for shareholders.

Financial Performance

Altair reported fourth-quarter results with software revenue reaching $179 million and total revenue reaching $193 million reflecting 17% and 14% growth, respectively, on a constant currency basis.

Regulatory Approval

The company announced it expects the transaction to complete earlier than previously expected, indicating the regulatory approval process is going smoothly.

Negative Factors

Guidance Suspension

Due to the pending acquisition with Siemens, the company had suspended guidance and will not host an earnings call to discuss results.

Licensing Model

Altair's units licensing model could pose some problem with most acquirers utilizing a subscription or traditional license + support scheme.

Market Rating

The analyst downgraded Altair Engineering's rating to Peer Perform following the acquisition announcement.

Altair Engineering Business Overview & Revenue Model

Company Description

Altair Engineering Inc. (ALTR) is a global technology company that provides software and cloud solutions in the areas of product development, high performance computing (HPC), and data analytics. The company operates primarily in the engineering, automotive, aerospace, and manufacturing sectors, offering a wide range of simulation technology and engineering services that empower client innovation and decision-making. Altair's core products include simulation-driven design software, data analytics platforms, and enterprise-class HPC solutions.

How the Company Makes Money

Altair Engineering generates revenue through the sale of software licenses, subscriptions, and related services. The company's primary revenue streams include the licensing of its suite of simulation and data analytics software, which is used by engineers and designers across various industries to optimize product performance and efficiency. Altair also offers cloud-based HPC solutions that allow organizations to run complex simulations and analyses at scale. Additionally, the company earns revenue from consulting services, training, and technical support, which provide clients with customized solutions and enhanced product utilization. Strategic partnerships with hardware vendors and cloud service providers further contribute to Altair's revenue by expanding the reach and capabilities of its offerings.

Altair Engineering Financial Statement Overview

Summary

Altair Engineering is in a solid financial position with strong revenue growth, efficient cost management, and robust cash flow generation. The company shows stability with low leverage and a strong equity base, although there is room for improvement in profitability metrics such as Net Profit Margin and Return on Equity.

Income Statement

Altair Engineering demonstrates strong revenue growth, showing a consistent upward trend with a remarkable Revenue Growth Rate of 8.67% from 2023 to 2024. The company maintains a robust Gross Profit Margin of 81.27% in 2024, indicating efficient cost management. However, the Net Profit Margin is modest at 2.13% due to lower net income relative to revenue, though improved from the negative margin in 2023. EBIT and EBITDA Margins have also improved, reflecting better operational efficiency.

Balance Sheet

The company maintains a healthy Debt-to-Equity ratio of 0.30, reflecting low financial leverage. The Return on Equity is sound at 1.65%, showing modest profits relative to equity. The Equity Ratio stands at 59.31%, suggesting a strong equity base. These factors indicate financial stability, although the ROE could be enhanced further to indicate better profitability.

Cash Flow

Altair Engineering shows a strong Free Cash Flow Growth Rate of 19.51% from 2023 to 2024, demonstrating effective cash generation. The Operating Cash Flow to Net Income Ratio is high at 10.87, indicating strong cash flow relative to net income. The Free Cash Flow to Net Income Ratio is also favorable at 9.87, underscoring robust cash generation capabilities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
665.79M	612.70M	572.22M	532.18M	469.92M
	Gross Profit
540.99M	490.91M	449.33M	402.51M	348.62M
	EBIT
17.68M	243.00K	-23.84M	12.34M	11.71M
	EBITDA
80.63M	57.86M	11.67M	37.42M	37.44M
	Net Income Common Stockholders
14.18M	-8.93M	-43.43M	-8.79M	-10.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
561.90M	467.46M	316.15M	413.74M	241.22M
	Total Assets
1.45B	1.36B	1.20B	1.16B	829.90M
	Total Debt
259.12M	338.83M	340.06M	229.19M	253.69M
	Net Debt
-302.77M	-128.63M	23.92M	-184.56M	12.47M
	Total Liabilities
588.46M	652.16M	635.00M	549.29M	450.53M
	Stockholders Equity
857.19M	711.33M	569.74M	613.98M	379.37M
Cash Flow		Free Cash Flow
140.00M	117.11M	29.92M	53.43M	24.66M
	Operating Cash Flow
154.08M	127.31M	39.57M	61.62M	32.88M
	Investing Cash Flow
-46.13M	-15.85M	-154.51M	-62.48M	-49.09M
	Financing Cash Flow
-7.04M	37.77M	22.98M	175.95M	31.25M

Altair Engineering Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 111.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALTR, the sentiment is Positive. The current price of 111.85 is above the 20-day moving average (MA) of 111.43, above the 50-day MA of 110.96, and above the 200-day MA of 100.74, indicating a bullish trend. The MACD of 0.24 indicates Positive momentum. The RSI at 65.72 is Neutral, neither overbought nor oversold. The STOCH value of 55.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALTR.

Altair Engineering Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDNS	77 Outperform	$79.45B	75.15	26.13%	―	13.48%	0.66%
ADSK	73 Outperform	$57.50B	52.68	49.69%	―	12.35%	22.28%
ANSS	68 Neutral	$28.11B	49.01	10.03%	―	12.11%	14.35%
ALTR	67 Neutral	$9.60B	675.02	1.81%	―	8.66%	―
PTC	62 Neutral	$18.53B	47.51	12.99%	―	6.05%	63.78%
Sector *	59 Neutral	$10.72B	10.22	-6.67%	3.02%	7.42%	-11.38%
SSYS	49 Neutral	$682.65M	―	-14.34%	―	-8.79%	5.32%

Altair Engineering Corporate Events

Altair Engineering Merges and Delists from NASDAQ

Altair Engineering has undergone a significant corporate restructuring as a result of a merger, effective March 26, 2025. The merger has led to Altair becoming a wholly owned subsidiary of a parent company, with a total consideration of approximately $9.7 billion paid to Altair’s stockholders. This corporate change has resulted in the termination of Altair’s existing credit agreements and the delisting of its Class A Common Shares from NASDAQ. Additionally, there have been changes in the executive leadership, with new appointments for the roles of CEO and CFO.