Altair Engineering is the IBD Stock Of The Day in the wake of joining the S&P MidCap 400 index. Altair stock has gained 10% in 2024.
On the stock market today, shares gained 8.7% to close at 92.92.
The engineering software company has forged a double-bottom base. Further, Altair holds a high-handle entry point of 93.69. Also, a 5% buy zone extends to 98.37.
Automotive companies are Altair's biggest customers. It also focuses on the electronics, energy and aerospace markets. Also, Altair recently acquired Research in Flight, maker of computational fluid dynamics (CFD) software.
"Altair verticalized the sales force last year, which caused some initial disruptions, but is starting to yield benefits," said Oppenheimer analyst Ken Wong in a report. "Altair will complement their four key verticals (autos, aerospace and defense, banking/financial services and technology) with the addition of energy, healthcare and life sciences, heavy equipment and rail, and consumer electronics."
Founded in 1985, Altair competes with Autodesk, Ansys and Dassault Systemes. Altair has focused on simulation design tools. Further, Altair also sells predictive analysis and optimization software.
Also, Altair provides engineering services.
Altair Stock: 2017 IPO
The Troy, Mich.-based company earned an adjusted 40 cents a share on sales of $171.5 million in the December-ended quarter. On a year-over-year basis, Altair earnings rose 11% while sales increased 4%.
"Software revenue grew 5.9% to $153.8 million and was driven by high retention rates, new customer growth, and expansions," said RBC Capital analyst Matthew Hedberg in a report. "Upside was due to good execution but also some deals closing sooner than expected. Management also noted that growth continues to be broad-based across geographies and verticals."
Analysts say companies are using simulation software earlier in the product development cycle.
"The company continues to leverage its platform computational intelligence to capitalize on the growing number of users and use-cases of simulation across key industries by emphasizing the democratization of these tools through integrated artificial intelligence and data analytics," said William Blair analyst Dylan Becker in a report.
He added: "This has enabled the company to expand its targeted base to those earlier in the development life cycle, which tend to be less technical, design-focused users. In addition, we believe the growing prioritization of data-driven decision-making and generative AI design capabilities will unlock significant cost savings for Altair's core customer segment over time."
The company went public at 13 on Nov. 1, 2017. The IPO raised $144 million.
Altair belongs to IBD's Computer-Software Design group. That group ranks No. 157 out of 197 industry groups.
ALTR Stock: Technical Ratings
Further, Altair stock holds a solid IBD Composite Rating of 82, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Altair stock has an Accumulation/Distribution Rating of D-plus. This rating analyzes price and volume changes in a stock over the past 13 weeks of trading. The current rating of ALTR stock indicates more funds are selling than buying.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Dassault Systemes and Synopsys have the highest Composite Ratings in the Computer-Software Design group.
In January, Synopsys agreed to buy Ansys in a $35 billion cash-and-stock deal.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
