![]() ![]() Sophisticated investors don’t receive a lot of value from hearing company executives take turns droning on about how great their sacred cow is. ![]() The best way to articulate a strategy is by providing simple quarterly/annual metrics for investors to follow that measure the success of that strategy. They help the company to attain an optimum share price that portrays its fundamental value. Perhaps the most concise description of investor relations can be found below: Harvard Business Review published a piece last year talking about how the changing role of the Investor Relations Officer demands taking an active role in articulating company strategy and purpose to all classes of investors. In fact, they provide investors with very little information relative to most software firms we cover. Just because their business model is unique doesn’t mean they can’t provide SaaS-like metrics such as annual recurring revenues ( ARR) buckets with numbers of customers for each, or retention metrics. Below, we’re shown the breakdown between software revenues which constitute 84% of total revenues (outlined in red) compared to services which constitute the rest. Is the 80/20 rule in effect here? We just don’t know, though we’re told no single customer accounts for more than 2% of total software billings. Net and gross retention show how sticky the platform is, while revenue buckets could show how their 13,000 customers are increasing their spend over time. Such a configuration is fine and dandy, but we’re not provided with SaaS metrics that show how healthy this business is. The average Altair customer uses more than 20 products from the portfolio of 77 products on offer. Altair customers buy usage units using single-year subscription contracts and then choose the apps they want to use over the year. ![]() Scapa described the company’s business model as something he introduced twenty years ago. Scapa), it can lead to a “we’ve always done it that way” mindset which can stall innovation. When the CEO and Chairman of the Board also happens to be a co-founder with a 37-year tenure ( as is the case with Altair’s Mr. By monopolizing both jobs, the Founder-CEO-Board Chair denies the company the opportunity to benefit from the skills, experience and capacity a second corporate leader could provide. When you have a CEO who also happens to be Chairman of the Board, it “can deny the organization talent at the top and lead to blind spots that undermine the organization’s ability to manage risks.” That’s according to a piece by Harvard Business Review which explains why the CEO shouldn’t also be the Board Chair, especially when said person happens to be a founder:Įven the most extraordinary founder’s talent set will likely not include both a CEO’s ability to establish a shared set of values, practices, and goals that enables the company to build a meaningful future and a board chair’s ability to direct the board in its oversight and strategy advisory roles. In the ESG world, such consolidated control is considered a red flag. Scapa – has final say on everything regarding the company he co-founded 37 years ago. He’s gonna need you to come in on Sunday too, mmmkay? Joking aside, we get the feeling that Altair’s leader – James R. It’s from a slide the Chairman and CEO of Altair presented at a Nasdaq investor conference, and it’s impossible to listen to this guy without thinking about Bill Lumbergh. Since going public in 2014, the company has managed to grow revenues at a compound annual growth rate ( CAGR) of almost 9%.Ībove you can see the areas in which Altair has been expanding over the years. The last time we looked at Altair was late 2019 in a piece titled Altair Engineering Stock is a Play on Simulated Design. One of those stocks is Altair Engineering ( ALTR). In the coming weeks, we’re going to peruse our “likes” and see if any quality companies merit a place in the four remaining open slots in our tech stock portfolio. And if we like a stock, it’s one we’d consider holding but don’t. If a stock is classified as “avoid,” we wouldn’t buy it for reasons noted in our catalog under the “Nanalyze Notes” field. We may not be buying more of it, or we may not think it’s the bee’s knees based on the latest information, but we are holding it in a real-money portfolio. If we love a stock, that means we’re holding it. We’ve opted to categorize our tech stock catalog in a similar fashion with three possible classifications for any given stock – love, like, or avoid. All content we produce at Nanalyze assumes the reader needs no technical background of any kind to understand it. ![]()
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