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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Altair Engineering Inc. (XNAS:ALTR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ALTR
Name:
ALTAIR ENGINEERING INC. (XNAS:ALTR)
Sector:
3.60M
Industry:
Software�Infrastructure
CEO:
Mr. James R. Scapa
Total Employees:
2,800
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 49.68% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ALTAIR ENGINEERING INC.(ALTR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
48.66
One Month Price Target:
$49.07
Six Month Price Target :
$51.12
Likely Price in One Year's Time:
Ticker:
$53.58
Likely Trading Range Today Under (Normal Volatility)
$48.48
Price Upper limit ($) :
$48.93
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$46.02
This week:
$42.75
This month :
$36.85
Other Primary facts
Market Cap:
3.93B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
79.95M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.16%
-14.07%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$60.91
$55.24
$36.41
$42.08
Medium risk (<10%) entry points
Buy Call
Sell Call
$53.39
Buy Put:
Sell Put:
$52.18
$43.91
$45.14
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ALTR
Sharpe Ratio:
3.21%
Comparison:
ALTR, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 96.19% higher than the industry
& ratio is 40.73% higher than the market/S&P 500 average
Average Returns/Yield of
ALTR
Daily returns:
0.10%
Weekly returns:
0.48%
Monthly returns:
1.90%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is 58.71% above industry average
Classification:
ALTR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.47
Statistical test of Returns:
ALTR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.69%
Weekly Volatility:
6.01%
Monthly Volatility:
12.03%
Yearly Volatility:
41.66%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.59%
Volatility in last five trading days has been -3.51% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.43%
Weekly VaR:
-12.14%
Monthly VaR:
-24.28%
How Much Can the price of
ALTR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-84.09%
This translates to price declining to:
$38.75
This translates to price declining to:
$7.74
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ALTR is a 71.33% riskier investment compared to the market/S&P 500 & is 46.78% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -19.28% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ALTR
Beta in relation to market/S&P 500--1.50
Expected beta in 1 year's time:
0.92
Expected beta in 3 year's time:
1.301
Unlevered (debt free) Beta:
1.681
Beta in relation to Nasdaq (XNAS):
0.705
Beta in relation to all global stocks::
0.763
Beta Comparison & Analysis
Beta of competitors/peers::
1.432
Beta is 5.04% higher than peers
Average Industry Beta:
1.112
Beta is 35.30% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.094
Alpha is 159.09% above industry average alpha yield
Alpha is 597% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ALTR
Equity cost of capital:
0.135
Equity cost of capital is 24.97% above industry mean WACC
Unlevered (without debt) cost of capital:
15.03%
Before-tax cost of debt:
3.80%
After-tax cost of debt:
3.00%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.00%
WACC is 47.34% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$6.78
Revenue growth rate per share of (3Y):
6.28
Annual revenue growth rate is -67.53% below industry average
EPS:
-$0.17
Expected Annual growth rate of EPS (3Y):
2.94%
Expected future EPS growth rate is -90.23% lower than the Software�Infrastructure industry
Free cash flow (FCF) per share:
$0.30
-
-
Debt per share
$0.24
EBITDA per share
$0.50
Valuation Analysis Today of
ALTR
P/E Ratio:
121.17
P/E Ratio of Competitors/Peers:
684.66
P/E ratio is -82.30% lower than main peers & is 85.74% higher than the industry
-
ALTR is -538.77% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
7.18
Price to sales ratio is -34.62% below the industry mean
P/B (Price to book value ratio):
6.28
Price to free cash flow: 160.88
Price to free cash flow ratio is 87.84% higher than the industry
Net income growth rate (3Y):
-159.07%
Net income growth rate is -101.88% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
3.04%
Net debt to equity ratio:
-24.32%
Debt to assets ratio:
1.66%
Net debt to assets ratio:
-13.28%
Debt-to-asset ratio is -97.62% below industry average
Ability to repay debt:
Interest coverage ratio:
4.1
Interest coverage ratio is -101.94% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.468
Statistical significance of correlation:
ALTR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is -2.38% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
-0.047
Covariance of price movement with the market:
-0.074
Kurtosis
4.949
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ALTR
Gross Profit Margin Ratio:
304%
Operating Profit Margin Ratio:
2.74%
Operating profit margin is -123.08% lower than the industry
Net Profit Margin Ratio:
304%
Effective Tax Rate:
445.09%
Effective tax rate is 1320.74% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-1.88%
Return on equity (ROE) is -101.76% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-1.03%
Return on assets (ROA) is -72.92% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
1.29
Current ratio is -44.58% below industry average
Cash Conversion Cycle (days):
75.6
Cash conversion cycle is -32.82% below industry average
The remaining useful life of property plant & equipment is: 6.8 years
Stock based compensation to net income ratio:
-160.11%
In-depth Efficiency Analysis
Revenue generated per employee:
193.5K
Each employee generates -51% less revenue than industry average revenue per employee
EBITDA generated per employee:
14.2K
Each employee generates -78% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 4.2K
Each employee generates -120% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.3K
Each employee generates -94% less free cash flow than industry average revenue per employee
Assets/Capital per employee
206.4K
Each employee generates -94% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 19.80%
Growth rate in R&D investment/expenditure is -863.70% lower than the industry
Competitors/Peer firms of
ALTR
TENABLE HOLDINGS, INC. (XNAS:TENB)
MIMECAST LIMITED (XNAS:MIME)
CMC MATERIALS, INC. (XNAS:CCMP)
MICROSTRATEGY INCORPORATED (XNAS:MSTR)
CRICUT, INC. (XNAS:CRCT)
SEMTECH CORPORATION (XNAS:SMTC)
POWER INTEGRATIONS, INC. (XNAS:POWI)
LUMINAR TECHNOLOGIES, INC. (XNAS:LAZR)
VICOR CORPORATION (XNAS:VICR)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
541.80M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
127.85M
413.95M
155.87M
91.14M
227.51M
136.36M
15.74M
399.11M
79.00K
9.68M
26.64M
39.69M
14.84M
- 11626.00K
3.37M
15.00M
- 11626.00K
Statement of Cash Flow
Date:
Period:
7.69M
Differed Income Tax :
- 67.00K
Stock Based Compensation :
18.61M
Change in Working Capital :
- 32548.00K
Accounts Receivables:
21.74M
Other Working Capital:
5.78M
Other Non-Cash Items:
573.00K
Net Cash Provided by Operating Activities:
5.79M
Investments in PP&E:
-
Net Acquisitions:
- 12971.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
405.58M
-
405.58M
124.63M
-
25.47M
555.67M
68.10M
379.32M
93.35M
-
8.23M
29.03M
578.02M
-
1.13B
6.06M
236.14M
15.03M
97.98M
90.57M
430.74M
18.85M
27.72M
83.74M
-
514.48M
792.00K
- 66620.00K
- 13008.0K
698.05M
March 31, 2022 at 6:00:00 AM
526.96M
619.21M
1.13B
-
254.98M
- 150596.0K
-
- 2533.00K
- 15504.00K
-
-
-
-
2.51M
2.51M
- 970.00K
- 8179.00K
405.83M
414.01M
5.79M
- 2190.00K
3.60M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
ALTR
2023
2024
2025
2026
2027
$53.85
$12.80
$14.10
$15.52
$17.09