The Altium Ltd (ASX: ALU) share price was trading down 2% at $35.5 apiece at market close on Friday.
But zoom the picture out a little and we see that shares in the cloud software company have tracked 14.71% higher this month.
Meanwhile, the S&P/ASX All Technology Index (ASX: XTX) is down 5.21% for the month.
Does this mean Altium deserves a spot in your portfolio? Let's look at what a broker had to say about it.
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What did the broker say?
Bell Potter, an Australian capital markets company, gave Altium shares a buy rating on Tuesday.
Not only that, but the company landed Altium with a price target of $37.50, giving it a modest 4.9% upside at the time of writing.
The rating came after Altium posted a strong result for FY22, with shares gaining 18% following the announcement.
Bell Potter said it was a "cracking result" and posted the following observations:
FY22 EBITDA grew 33% to US$79.8m which was 6% above our forecast of US$75.4m. The beat was driven by higher revenue than forecast (US$220.8m vs BPe US$218.5m and guidance towards top end of US$209-217m) and a better EBITDA margin than forecast (36.2% vs BPe 34.5% and guidance towards low end of 34-36%).
Note there were no positive one-offs which drove the beat and the result was even negatively impacted by one-off costs of US$1.3m from relocating staff out of Ukraine (so that the underlying EBITDA margin was actually 36.7%).
The broker continued:
Altium provided FY23 guidance of revenue b/w US$255-265m and an EBITDA margin of b/w 35-37%. The company also provided a breakdown of the revenue guidance b/w US$195-200 in electronic design software and US$60-65m in engineering cloud platform.
Altium also reiterated its FY26 target of US$500m revenue and an EBITDA margin of 38-40% but said it believes it can now get there with <100,000 subscriptions.
Altium share price snapshot
The Altium share price is down 20.71% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 10.09% over the same period.
The company's market capitalisation is $4.67 billion.
