What's happening: It's been a rough couple of days for shareholders of Altium Limited (ASX: ALU) which has today fallen 6.5%, following on from Friday's 8.1% decline.
Why it's happening: The electronics design software provider released its second quarter (Q2) and half-year revenue and sales update on Friday. While the results were initially taken well by investors – rising 4.5% early in the day – the stock ended the session firmly in the red. There are two reasons why the shares may have been punished so hard.
Firstly, the stock is trading on a rather high price-earnings multiple. While the company reported a 23% jump in revenue for Q2 (on a constant currency basis) as well as a 10% rise in sales, investors may have been hoping for even more.
Secondly, it's also possible that comments regarding "challenging economic conditions in Europe and the weakening of the Euro against the USD" may have spooked investors. The company said these factors have created a headwind which Altium will have to contend with for the remainder of the financial year. Regardless, the company noted: "We continue to remain confident that our full year performance will be consistent with our expectations."
