Altair Engineering Inc.

ALTR

Services-Prepackaged Software

Mkt Cap

$7.505B

PE

783.37

Debt

$307.8M

Cash

$557.7M

EV

$7.255B

FCF

$130.3M

Market Cap

$7.505B

P/E Ratio

783.37

Debt

$307.8M

Cash

$557.7M

EV

$7.255B

FCF

$130.3M

Charts data: {"Earnings":[{"time":"2015-12-30","value":10931000},{"time":"2016-12-30","value":10163000},{"time":"2017-12-30","value":-99407000},{"time":"2018-12-30","value":13715000},{"time":"2019-12-30","value":-7542000},{"time":"2020-12-30","value":-10500000},{"time":"2021-12-30","value":-8794000},{"time":"2022-12-30","value":-43429000},{"time":"2023-12-30","value":-8926000}],"Sales":[{"time":"2015-12-30","value":294129000},{"time":"2016-12-30","value":313240000},{"time":"2017-12-30","value":333333000},{"time":"2018-12-30","value":396379000},{"time":"2019-12-30","value":458915000},{"time":"2020-12-30","value":469921000},{"time":"2021-12-30","value":532179000},{"time":"2022-12-30","value":572221000},{"time":"2023-12-30","value":612701000}],"Net Margins":[{"time":"2015-12-30","value":0.03716396547093282},{"time":"2016-12-30","value":0.03244477078278636},{"time":"2017-12-30","value":-0.2982212982212982},{"time":"2018-12-30","value":0.034600723045368195},{"time":"2019-12-30","value":-0.016434415959382456},{"time":"2020-12-30","value":-0.02234418125599835},{"time":"2021-12-30","value":-0.016524515247689216},{"time":"2022-12-30","value":-0.07589550191272253},{"time":"2023-12-30","value":-0.014568280450007427}],"Assets":[{"time":"2016-12-30","value":250776000},{"time":"2017-12-30","value":287871000},{"time":"2018-12-30","value":483216000},{"time":"2019-12-30","value":743145000},{"time":"2020-12-30","value":829902000},{"time":"2021-12-30","value":1163275000},{"time":"2022-12-30","value":1204738000},{"time":"2023-12-30","value":1363493000}],"Stockholders Equity":[{"time":"2015-12-30","value":-42039000},{"time":"2016-12-30","value":-34653000},{"time":"2017-12-30","value":60591000},{"time":"2018-12-30","value":286782000},{"time":"2019-12-30","value":354707000},{"time":"2020-12-30","value":378586000},{"time":"2021-12-30","value":613197000},{"time":"2022-12-30","value":569736000},{"time":"2023-12-30","value":711331000}],"ROE":[{"time":"2015-12-30","value":-0.26002045719450984},{"time":"2016-12-30","value":-0.2932790811762329},{"time":"2017-12-30","value":-1.6406231948639236},{"time":"2018-12-30","value":0.04782378252470518},{"time":"2019-12-30","value":-0.021262619570518768},{"time":"2020-12-30","value":-0.027734781529163782},{"time":"2021-12-30","value":-0.01434123128456271},{"time":"2022-12-30","value":-0.0762265329907185},{"time":"2023-12-30","value":-0.01254830732809339}],"ROA":[{"time":"2016-12-30","value":0.061596803521868124},{"time":"2017-12-30","value":-0.11552744111077531},{"time":"2018-12-30","value":0.05592530048673885},{"time":"2019-12-30","value":0.0110436052183625},{"time":"2020-12-30","value":0.014113714631366113},{"time":"2021-12-30","value":0.010607122133631342},{"time":"2022-12-30","value":-0.005758098441320851},{"time":"2023-12-30","value":0.009254906332485756}]}

Altair Engineering Inc., together with its subsidiaries, provides software and cloud solutions in the areas of simulation, high-performance computing, data analytics, and artificial intelligence in the United States and internationally. The company operates in two segments: Software and Client Engineering Services. The Software segment offers solvers and optimization technology products, high-performance computing software applications and hardware products, modeling and visualization tools, data analytics and analysis products, and Internet of Things platform and analytics tools, as well as support and the complementary software products. This segment also provides software technologies in the areas of computational fluid dynamics and fatigue, manufacturing process simulation, and cost estimation for the applications in marine, motorcycle, aerospace, chemical, and architecture industries; and software-related services, such as consulting, implementation, and training services that focuses on the product design and development expertise and analysis from the component level up to complete product engineering at various stage of the lifecycle. The Client Engineering Services segment provides client engineering services. In addition, the company is involved in the development and sale of solid state lighting technology along with communication and control protocols based on its intellectual property for the direct replacement of fluorescent light tubes with LED lamps. Its integrated suite of software optimizes design performance across various disciplines, including structures, motion, fluids, thermal management, electromagnetics, system modeling, and embedded systems. The company serves universities, government agencies, manufacturers, pharmaceutical firms, banking, financial services, and insurance, weather prediction agencies, and electronics design companies. Altair Engineering Inc. was incorporated in 1985 and is headquartered in Troy, Michigan.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Altair Engineering Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$130.3M	$169.4M	$215.5M	$268.2M	$326.4M	$388M	$450.5M	$510.6M	$564.5M	$608.4M	$638.8M	$6.388B
DCF		$147.3M	$163M	$176.4M	$186.6M	$192.9M	$194.8M	$191.9M	$184.5M	$172.9M	$157.9M	$1.579B
Value	$3.347B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 1.5%

Earnings Stability -110%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	3.7%	3.2%	-30%	3.5%	-1.6%	-2.2%	-1.7%	-7.6%	-1.5%	1.5%
ROA	-	6.2%	-12%	5.6%	1.1%	1.4%	1.1%	-0.58%	0.93%	2.1%
ROE	-26%	-29%	-160%	4.8%	-2.1%	-2.8%	-1.4%	-7.6%	-1.3%	1.3%

What is the average Net Margin?

The average Net Margin over the past 5 years is -1.85%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -1.2%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +1.59%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.82%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is -1.74%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -1.3%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

Data are missing

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	8.02	0.07	1.09	10.66	10.87	3.71	10.21	2.62	2.36
Debt Equity	-	-2.77	0.01	0.11	0.65	0.77	0.33	0.54	0.43	0.40
MIN
Graham Stability	-	-	-	-	-	-	-	-	-	-

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.36.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.02.

What is the Graham’s Stability?

Graham’s Stability measure stands at -.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Data are missing

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	10%	9.1%	9.2%	7.1%	-0.25%
Net Income	-	-	-	-	-
Stockholders Equity	-	20%	23%	25%	-51%
FCF	39%	32%	64%	290%	9.3%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +9.1%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -0.25%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +19.92%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -50.84%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +31.69%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +9.34%.