Altair Engineering Stock: An Information Problem
Altair Engineering stock $ALTR is a conglomerate of sorts with 84% of 2021 revenues coming from 77 different #software products - from physics simulation to predictive analytics, to high-performance computing. With gross margins of approaching 80% and 13,000 clients, it's a stock we liked initially. But then, we tried to figure out where the growth was coming from or what exposure we're getting exactly and couldn't find a thing. This is a firm led by a 37-year tenured CEO/Chairman of the Board/Co-Founder who seems to be set in doing things the way they've always been done for the past two decades as opposed to transitioning to a #SaaS model that might enjoy a market premium as all SaaS firms do. We're passing on ALTR stock for now. We love software companies because they’re able to realize such high margins, and Altair is no different with gross margins approaching 80%. However, we’re not comfortable running blind with so few health metrics and no indicator as to where their growth is coming from.
RESEARCH PIECES USED IN THIS VIDEO:
1. Altair Engineering Stock: An Information Problem
https://www.nanalyze.com/2022/08/alta...
2. Altair Engineering Stock is a Play on Simulated Design
https://www.nanalyze.com/2019/12/alta...
3. Trimble Stock and the Conglomerate Discount
https://www.nanalyze.com/2022/07/trim...
CHAPTERS:
00:00 Intro
00:49 Mosaic Theory
03:15 Altair's three segments
05:36 Altair's business model
06:59 A governance problem
10:02 Software vs services
10:57 An information problem
14:40 Altair's valuation
15:24 Conclusion
ABOUT US:
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