On Thursday, Oppenheimer maintained a positive stance on Altair Engineering (NASDAQ:ALTR), reiterating its Outperform rating and a price target of $100.00. The firm's confidence in Altair is based on the company's long-term EBITDA margin targets, which are around 27%, supporting the view of Altair as a compelling margin expansion narrative within their coverage.
The assessment followed Altair's indication of notable EBITDA margin growth paired with a prediction of double-digit software revenue increases through the fiscal year 2026.
This outlook comes despite investor reservations stemming from a cautious fiscal year 2024 forecast provided at the end of the fourth quarter of 2023. The management's EBITDA goal of approximately 27% suggests an acceleration in margin growth from the expected fiscal year 2024, which may be regarded as ambitious by some market observers.
The anticipated increase in profitability is attributed mainly to a growing proportion of higher-margin software revenue, along with operational expenditure leverage across all three of its business segments.
Altair's management has outlined a clear path to achieve these targets, which reinforces the analyst's positive perspective on the company's future performance.
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