Altair Engineering Inc. Just Beat EPS By 67%: Here's What Analysts Think Will Happen Next

As you might know, Altair Engineering Inc. (NASDAQ:ALTR) just kicked off its latest quarterly results with some very strong numbers. The company beat forecasts, with revenue of US$173m, some 2.2% above estimates, and statutory earnings per share (EPS) coming in at US$0.20, 67% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Altair Engineering

Taking into account the latest results, the most recent consensus for Altair Engineering from ten analysts is for revenues of US$657.4m in 2024. If met, it would imply an okay 6.1% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 208% to US$0.35. In the lead-up to this report, the analysts had been modelling revenues of US$667.1m and earnings per share (EPS) of US$0.38 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$94.13, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Altair Engineering, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$85.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Altair Engineering is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Altair Engineering's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Altair Engineering'shistorical trends, as the 8.2% annualised revenue growth to the end of 2024 is roughly in line with the 8.1% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that Altair Engineering is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Altair Engineering. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$94.13, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Altair Engineering going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Altair Engineering that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.