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Altair (ALTR) Hits 52-Week High: What's Driving the Stock?
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Altair Engineering Inc. (ALTR - Free Report) touched a new 52-week high of $76.16 on May 30. The stock pulled back to end the trading session at $75.56, up 1.4% from the previous day’s closing price of $74.52.
ALTR has gained 66.2% in the year-to-date period compared with the Zacks Engineering - R and D Services industry’s growth of 9.6%, the Zacks Construction sector’s increase of 12.8% and S&P 500 Index’s growth of 10.7%.
Amid high operating and acquisition-related expenses as well as tough competition, this Zacks Rank #3 (Hold) company has been benefiting from strategic investments in research and development, accretive acquisitions and robust product demand.
Solid Buyouts: Acquisitions are an important part of Altair’s strategy to supplement its organic growth and diversify extensively across its portfolio. In 2022, the company completed three acquisitions that helped it to achieve growth as it made it easy for its customers to get access to its diverse portfolio of solutions. On Sep 13, 2022, ALTR acquired RapidMiner, a leader in advanced data analytics and machine learning (ML) software.
On Jun 13 and Jun 6 of 2022 the company acquired Concept Engineering and Gen3D, respectively. Concept Engineering is the leading provider of electronic system visualization software that accelerates the development, manufacture, and service of complex electrical and electronic systems. On the other hand, Gen3D is a startup by the University of Bath, U.K., pioneering in implementing the implicit geometry method for describing highly complex geometries such as lattice structures in additive manufacturing (AM).
Consistent Innovation: ALTR remains focused on investing in innovations and enhancing digital solutions for its customers. It is increasing its investment to support technology and automation that will deliver operational excellence and an increased volume of sales.
On May 23, 2023, the company announced a software update to its simulation portfolio. Simulation 2022.3 is the updated version of Simulation 2022.2, focusing on cloud collaboration and computing, efficient end-to-end simulation workflows, and superior design creation with AI-powered simulation. On Apr 25, the company launched an innovative, cloud-native structural simulation software, Altair SimSolid Cloud. This will allow its users to access next-generation simulation technology from any web browser.
These digital innovations help ALTR to stay competitive in the market by providing its customers with up-to-date technology solutions. These initiatives assist the company in boosting top-line growth.
Increased 2023 Outlook: Given its growth momentum, ALTR increased its 2023 guidance, inducing optimism among investors. For 2023, ALTR now expects Software revenues to be $561 million compared with the previous expectation of $551 million. Also, total revenues are now expected to be $624 million compared with the previous expected value of $614 million.
ALTR anticipates its adjusted EBITDA to increase to $130 million in 2023 compared with the previous expectation of $120 million.
Sufficient Liquidity: ALTR maintains a strong balance sheet, liquidity and a well-structured debt maturity profile. Cash and cash equivalents as of Mar 31, 2023 came in at $378.4 million compared with $316.1 million at 2022-end. As of Mar 31, 2023, the company had $200 million available under its revolving credit facility. The long-term debt at the end of first-quarter 2023 was $225 million, down from $305.6 million at 2022-end.
Key Picks
Here are some top-ranked stocks that investors may consider from the same sector.
Martin Marietta Materials, Inc. (MLM - Free Report) currently sports a Zacks Rank #1. MLM delivered a trailing four-quarter earnings surprise of 31%, on average. Shares of the company have gained 17.9% in the year-to-date period.
The Zacks Consensus Estimate for MLM’s 2023 sales and EPS indicates growth of 19% and 32.1%, respectively, from the previous year’s reported levels.
Vulcan Materials Company (VMC - Free Report) currently carries a Zacks Rank #1. VMC has a trailing four-quarter earnings surprise of 7.1%, on average. Shares of the company have gained 12% in the year-to-date period.
The Zacks Consensus Estimate for VMC’s 2023 sales and EPS indicates growth of 5.9% and 26.2%, respectively, from the previous year’s reported levels.
Watsco, Inc. (WSO - Free Report) currently sports a Zacks Rank #1. WSO delivered a trailing four-quarter earnings surprise of 5.3%, on average. Shares of the company have gained 32.7% in the year-to-date period.
The Zacks Consensus Estimate for WSO’s 2023 sales and EPS indicates growth of 3.1% and 2.1%, respectively, from the previous year’s reported levels.
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Altair (ALTR) Hits 52-Week High: What's Driving the Stock?
Altair Engineering Inc. (ALTR - Free Report) touched a new 52-week high of $76.16 on May 30. The stock pulled back to end the trading session at $75.56, up 1.4% from the previous day’s closing price of $74.52.
ALTR has gained 66.2% in the year-to-date period compared with the Zacks Engineering - R and D Services industry’s growth of 9.6%, the Zacks Construction sector’s increase of 12.8% and S&P 500 Index’s growth of 10.7%.
Amid high operating and acquisition-related expenses as well as tough competition, this Zacks Rank #3 (Hold) company has been benefiting from strategic investments in research and development, accretive acquisitions and robust product demand.
Image Source: Zacks Investment Research
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Drivers
Solid Buyouts: Acquisitions are an important part of Altair’s strategy to supplement its organic growth and diversify extensively across its portfolio. In 2022, the company completed three acquisitions that helped it to achieve growth as it made it easy for its customers to get access to its diverse portfolio of solutions. On Sep 13, 2022, ALTR acquired RapidMiner, a leader in advanced data analytics and machine learning (ML) software.
On Jun 13 and Jun 6 of 2022 the company acquired Concept Engineering and Gen3D, respectively. Concept Engineering is the leading provider of electronic system visualization software that accelerates the development, manufacture, and service of complex electrical and electronic systems. On the other hand, Gen3D is a startup by the University of Bath, U.K., pioneering in implementing the implicit geometry method for describing highly complex geometries such as lattice structures in additive manufacturing (AM).
Consistent Innovation: ALTR remains focused on investing in innovations and enhancing digital solutions for its customers. It is increasing its investment to support technology and automation that will deliver operational excellence and an increased volume of sales.
On May 23, 2023, the company announced a software update to its simulation portfolio. Simulation 2022.3 is the updated version of Simulation 2022.2, focusing on cloud collaboration and computing, efficient end-to-end simulation workflows, and superior design creation with AI-powered simulation. On Apr 25, the company launched an innovative, cloud-native structural simulation software, Altair SimSolid Cloud. This will allow its users to access next-generation simulation technology from any web browser.
These digital innovations help ALTR to stay competitive in the market by providing its customers with up-to-date technology solutions. These initiatives assist the company in boosting top-line growth.
Increased 2023 Outlook: Given its growth momentum, ALTR increased its 2023 guidance, inducing optimism among investors. For 2023, ALTR now expects Software revenues to be $561 million compared with the previous expectation of $551 million. Also, total revenues are now expected to be $624 million compared with the previous expected value of $614 million.
ALTR anticipates its adjusted EBITDA to increase to $130 million in 2023 compared with the previous expectation of $120 million.
Sufficient Liquidity: ALTR maintains a strong balance sheet, liquidity and a well-structured debt maturity profile. Cash and cash equivalents as of Mar 31, 2023 came in at $378.4 million compared with $316.1 million at 2022-end. As of Mar 31, 2023, the company had $200 million available under its revolving credit facility. The long-term debt at the end of first-quarter 2023 was $225 million, down from $305.6 million at 2022-end.
Key Picks
Here are some top-ranked stocks that investors may consider from the same sector.
Martin Marietta Materials, Inc. (MLM - Free Report) currently sports a Zacks Rank #1. MLM delivered a trailing four-quarter earnings surprise of 31%, on average. Shares of the company have gained 17.9% in the year-to-date period.
The Zacks Consensus Estimate for MLM’s 2023 sales and EPS indicates growth of 19% and 32.1%, respectively, from the previous year’s reported levels.
Vulcan Materials Company (VMC - Free Report) currently carries a Zacks Rank #1. VMC has a trailing four-quarter earnings surprise of 7.1%, on average. Shares of the company have gained 12% in the year-to-date period.
The Zacks Consensus Estimate for VMC’s 2023 sales and EPS indicates growth of 5.9% and 26.2%, respectively, from the previous year’s reported levels.
Watsco, Inc. (WSO - Free Report) currently sports a Zacks Rank #1. WSO delivered a trailing four-quarter earnings surprise of 5.3%, on average. Shares of the company have gained 32.7% in the year-to-date period.
The Zacks Consensus Estimate for WSO’s 2023 sales and EPS indicates growth of 3.1% and 2.1%, respectively, from the previous year’s reported levels.