It was reported on September 30, that George J Christ, 10% Owner at Altair Engineering ALTR executed a significant insider sell, according to an SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Monday outlined that Christ executed a sale of 50,048 shares of Altair Engineering with a total value of $4,758,223.

The latest update on Tuesday morning shows Altair Engineering shares down by 3.2%, trading at $92.45.

All You Need to Know About Altair Engineering

Altair Engineering Inc is a provider of enterprise-class engineering software enabling origination of the entire product lifecycle from concept design to in-service operation. The integrated suite of software provided by the company optimizes design performance across multiple disciplines encompassing structures, motion, fluids, thermal management, system modeling, and embedded systems. It operates through two segments: Software which includes the portfolio of software products such as solvers and optimization technology products, modeling and visualization tools, industrial and concept design tools, and others; and Client Engineering Services which provides client engineering services to support customers. Majority of its revenue comes from the software segment.

Financial Milestones: Altair Engineering’s Journey

Revenue Growth: Altair Engineering displayed positive results in 3 months. As of 30 June, 2024, the company achieved a solid revenue growth rate of approximately 5.41%. This indicates a notable increase in the company’s top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Profitability Metrics: Unlocking Value

• Gross Margin: The company sets a benchmark with a high gross margin of 79.49%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, Altair Engineering exhibits below-average bottom-line performance with a current EPS of -0.06.

Debt Management: Altair Engineering’s debt-to-equity ratio is below the industry average. With a ratio of 0.33, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Exploring Valuation Metrics Landscape:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 298.47 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: The current P/S ratio of 12.83 is above industry norms, reflecting an elevated valuation for Altair Engineering’s stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Altair Engineering’s EV/EBITDA ratio stands at 95.92, surpassing industry benchmarks. This places the company in a position with a higher-than-average market valuation.

Market Capitalization Analysis: Falling below industry benchmarks, the company’s market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Understanding the Significance of Insider Transactions

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

Exploring the legal landscape, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider’s new purchase, there’s a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

The Insider’s Guide to Important Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Altair Engineering’s Insider Trades.

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This article was generated by Benzinga’s automated content engine and reviewed by an editor.