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Altair Engineering Inc (ALTR)
NASDAQ:ALTR
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Altair Engineering
(NASDAQ:ALTR)67Neutral
Positive Factors
Acquisition
The announced acquisition by Siemens for $113 per share in an all-cash deal is a good outcome for shareholders.
Revenue Growth
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.
Negative Factors
Stock Rating Downgrade
The analyst downgraded Altair Engineering's rating to Peer Perform following the acquisition announcement.
Altair Engineering (ALTR) vs. S&P 500 (SPY)
Market Cap
$9.57B
Dividend YieldN/A
Average Volume (3M)775.31K
Price to Earnings (P/E)672.5
Beta (1Y)1.32
Revenue Growth8.66%
EPS GrowthN/A
CountryUS
Employees3,500
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)0.17
Shares Outstanding60,401,222
10 Day Avg. Volume740,780
30 Day Avg. Volume775,307
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)14.38
Price to Cash Flow (P/CF)63.80
P/FCF Ratio63.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$113.00Price Target Upside1.49% Upside
Rating ConsensusHold
Number of Analyst Covering3
Altair Engineering Business Overview & Revenue Model
Company DescriptionAltair 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 MoneyAltair 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.85
Very Positive
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.78
Positive
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.82
Very Positive
| 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
Positive
111.34
Price Trends
110.25
Positive
106.69
Positive
99.13
Positive
Market Momentum
0.45
Positive
62.31
Neutral
45.70
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 111.34 is above the 20-day moving average (MA) of 111.06, above the 50-day MA of 110.25, and above the 200-day MA of 99.13, indicating a bullish trend. The MACD of 0.45 indicates Positive momentum. The RSI at 62.31 is Neutral, neither overbought nor oversold. The STOCH value of 45.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALTR.
Altair Engineering Risk Analysis
Altair Engineering disclosed 76 risk factors in its most recent earnings report. Altair Engineering reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Altair Engineering Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $57.50B | 52.15 | 42.43% | ― | 12.46% | 22.28% | |
67 Neutral | $9.57B | 672.48 | 1.65% | ― | 8.66% | ― | |
66 Neutral | $66.26B | 62.61 | 22.58% | ― | 13.48% | 0.66% | |
66 Neutral | $29.21B | 49.73 | 9.46% | ― | 12.11% | 14.35% | |
63 Neutral | $19.06B | 48.87 | 12.14% | ― | 6.05% | 63.78% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
54 Neutral | $744.55M | ― | -11.22% | ― | -8.26% | 17.82% |
* Technology Sector Average
Performance Comparison
ALTR
Altair Engineering
111.34
29.82
36.58%
ANSS
Ansys
323.22
-5.57
-1.69%
ADSK
Autodesk
267.43
20.14
8.14%
CDNS
Cadence Design
241.29
-66.41
-21.58%
SSYS
Stratasys
10.61
-1.08
-9.24%
PTC
PTC
158.44
-20.75
-11.58%
Altair Engineering Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -0.39% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Altair's strong revenue performance, especially in the software segment, driven by large contracts in aerospace and defense. The company is recognized for its leadership in data science and machine learning, evidenced by its position in the Gartner Magic Quadrant. Despite some foreign exchange impacts on margins, the overall trajectory appears positive with strategic acquisitions and partnerships poised to drive future growth.Highlights
Exceeding Revenue Guidance
Altair's total quarterly revenue was $148.8 million, with software revenue accounting for $135.4 million, both surpassing the high end of their guidance for the quarter.
Strong Software Revenue Growth
Software revenue grew 10.6% year-over-year in constant currency, and software revenue as a percentage of total revenue increased to 91% from 88.8% in the same quarter last year.
Record-Breaking Aerospace and Defense Contracts
Altair signed an 8-figure, 3-year contract with a multinational aerospace company, their largest deal ever, and a 7-figure agreement with a European aerospace, defense, and security company, marking a 49% year-on-year expansion.
Recognition in Data Science and Machine Learning
Altair was named a leader in the Gartner Magic Quadrant for data science and machine learning platforms for their Altair RapidMiner offering.
Strategic Acquisitions and Partnerships
Acquired Metrics Design Automation to enhance semiconductor simulation capabilities and partnered with Hewlett Packard to enrich the Altair Material Data Center.
Expanding Indirect Sales Channel
Added three new channel partners to extend the reach of Altair's data analytics and AI solutions across new regions.
Lowlights
Impact of Foreign Exchange Rates
Changes in foreign exchange rates impacted Altair's full-year adjusted EBITDA guidance and cash flow expectations.
Slight Decline in Adjusted EBITDA Margin
Adjusted EBITDA margin was 11.7% compared to 12.1% in the prior year, reflecting planned investments in product development and sales capacity.
Company Guidance
During the Q2 2024 earnings call for Altair Engineering, a detailed guidance was provided for the upcoming quarters and full year. For Q3, Altair expects software revenue to be in the range of $130 million to $133 million, marking a year-over-year increase of 9.2% to 11.7% in reported currency. Total revenue for Q3 is forecasted between $145 million and $148 million, reflecting an increase of 8.2% to 10.4% year-over-year. Full-year 2024 projections include software revenue ranging from $590 million to $600 million, translating to a 7.3% to 9.1% increase over 2023, and total revenue between $648 million and $658 million, which is a 5.8% to 7.4% rise. Furthermore, adjusted EBITDA for the full year is expected to be between $136 million to $144 million, accounting for 21.0% to 21.9% of total revenue, with free cash flow anticipated to be in the range of $122 million to $130 million. These projections take into account the impact of foreign exchange rate changes, which have also influenced the margin expectations.Altair Engineering Corporate Events
Delistings and Listing ChangesM&A Transactions
Altair Engineering to be Acquired by Siemens
Positive
Oct 30, 2024
Altair Engineering Inc. has entered into a definitive agreement to be acquired by Siemens Industry Software Inc. for $10.6 billion, offering Altair stockholders $113 per share in cash, a 19% premium over recent stock prices. This merger, expected to close in the latter half of 2025, promises to integrate Altair’s simulation and AI expertise with Siemens’ digital industry strengths, reinforcing Siemens’ leadership in industrial software. As this deal progresses, Altair’s common stock will be delisted from public exchanges.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.