The Altium Limited (ASX: ALU) share price has been struggling in 2022.
Since the start of the year, the electronic design software company's shares have fallen 22%.
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Is the weakness in the Altium share price a buying opportunity?
While the pullback in the Altium share price this year has been disappointing for shareholders, it could be a buying opportunity for others.
According to a note out of Bell Potter this week, the broker has retained its buy rating and lifted its price target to $41.25.
Based on the current Altium share price of $34.69, this implies potential upside of 19% for investors over the next 12 months.
What did the broker say?
Bell Potter notes that there have been a couple of recent developments which the market may be interpreting as headwinds.
The first is the war in Ukraine and the negative impact this could have on revenue out of Russia and on its research and development activities in Ukraine. However, Bell Potter notes that Russia only accounts for 1%-2% of Altium's revenue and the majority of staff in Ukraine have been relocated to its office in Poland.
The other potential headwind is the recently announced strategic partnership between Cadence Design Systems and Dassault Systèmes. This partnership will see the two companies combine platforms and provide a joint solution. However, once again, the broker doesn't believe this is a material headwind.
It explained: "In the case of the Cadence/Dassault strategic partnership this is not new – the two have already been working together for some time – and is focused on the high-end enterprise area of the market (where Altium does not tend to compete). We therefore do not see much if any impact on Altium from these two developments in the current half or in future periods."
In light of this, it continues to forecast strong profit growth in the coming years and sees a lot of value in the Altium share price at the current level.
