What’s up with the Altium share price?
‘In response to media speculation today, Altium Limited advises that it has not received any further offer from Autodesk.’
In June, Altium (ASX: ALU) was faced with an optimistic dilemma: the Nasdaq listed Autodesk was proposing to buy the company, for $38.50 per share. That was a steep premium to where the stock traded at, at the time, and the stock, unsurprisingly surged in response.
Altium’s management however swiftly shot down that offer – at that price – saying it significantly undervalued the business. 'Altium has a unique position in the electronics ecosystem and in the past unsolicited acquisition interest has developed from partnership dialogues with others in the ecosystem,’ management said.
Then a bit later in June, Altium released a trading update to the market. Issuing a downgrade in the process, saying it expected full-year revenue and margins to now come in at the low-end of the previous guidance range. Specifically new guidance was as follows:
- FY21 revenue of between US$190 million to US$195 million
- FY21 margins of between 37% to 39%
Despite tempering expectations, Altium’s Chief Financial Officer remained upbeat, saying:
'Momentum has returned to Altium's business with double-digit growth in the second half, however, after a slow first half due to the impact of COVID and our pivot to the cloud, the full year is likely to be at, or slightly below, the low end of our guidance.'
Confidence in the software company is likely at an all-time low, with Altium now having issued 7 downgrades in just 18 months. As analysts from RBC put it: the company ‘still has some work to do to rebuild market confidence in the growth outlook.’
Despite that, RBC remains confident in the mid-term outlook for Altium, rating the stock Sector Perform while assigning it a $37.00 price target.
Do you have a view on Altium? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.
For example, to buy (long) or sell (short) ASX-listed stocks using CFDs, follow these easy steps:
- Create an IG Trading Account or log in to your existing account
- Enter <Company name> in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
For investors not looking to trade stocks, you can invest in shares directly through our share trading service.
The latest twist in the Autodesk offer
Mind you, the whole saga got a lot more interesting last week (and today), after reports emerged from the Australian Financial Review that Autodesk upped its takeover offer to $40.00 per share and that Altium had rejected that upped offer.
Those reports triggered a crash, with Altium falling ~10% on Monday, in response. Altium rushed its shares into a trading halt at 10:17 AM, then told the market at 11:14 AM that claims of a $40.00 per share takeover bid were categorically false. The company told the market:
'In response to media speculation today, Altium Limited advises that it has not received any further offer from Autodesk. All details relating to the Autodesk offer have been disclosed by the Company in its ASX announcement releases to the market on 7 June 2021.'
Like clockwork, the stock rose off the intraday low it recorded at 10:10 AM, trading as much as 13% off that bottom during the session.
Looking ahead, Altium is set to report its full-year results on 23 August.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Live prices on most popular markets