The Altium Limited (ASX: ALU) share price is trading higher today – up 0.26% at the time of writing to $34.96 a share.
Although Altium is trailing the performance of the broader S&P/ASX 200 Index (ASX: XJO) today (which is up over 2%), it's still been a fantastic few weeks to hold Altium shares. Remember, this is a company that was asking almost $23 just eight weeks ago – meaning an investor that bought in then would be sitting on a healthy gain of almost 50% today.
But is there still room for Altium shares to run?
Here's why you might (or might not) want to throw $3,000 into Altium shares today.
Are Altium shares a good deal today?
Altium is one of the ASX's most exciting tech stocks. It's even part of the most-exclusive WAAAX club of tech market darlings that have captured investors' attention over the past couple of years.
The company makes and markets software (creatively called Altium Design) that aims to assist electrical engineers with designing and producing printed circuit boards. It sells this software through the highly lucrative Software-as-a-Service (SaaS) model as well, which sets the company up very well for strong recurring revenue streams.
Printed circuit boards (PCBs) are an essential component of every mildly complex modern electronic device you can think of. Everything from smartphones and TVs to refrigerators and cars are full of PCBs and each one requires a different and unique design. The future possibilities are truly endless, in my view.
Altium has found a brilliant way to exploit this niche with its Design software, which has proved remarkably popular in its field. Altium has long had a goal of hitting 100,000 subscribers by 2025 (for its software, not its YouTube channel), which it looks well on the way to achieving.
But one of the best things about Altium shares in 2020? Its management doesn't see too much of an impact on its core business from the outbreak of the coronavirus, and subsequent economic shutdowns. In a recent ASX release, the company's CEO stated:
"At an industry level, electronic design is holding up relatively well in the new environment as engineers use excess time and capacity from the slowdown in manufacturing and supply chain to revert back to prototype designs."
Although Altium did withdraw its 2020 guidance at the same time, I think the move was more precautionary that foreboding, judging by the above statement.
Foolish takeaway
Altium is a high-growth company that I believe has a bright future ahead of it. It's a company sitting in a powerful tailwind that should last well into the decade and beyond.
On current prices, I think Altium is a little expensive (with a price-to-earnings ratio of 56.5). But, if you're a true believer in Altium and have a long time horizon, it still has the potential to be a good investment today, in my view.
