Altair Engineering Inc (ALTR)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 81.25% | 80.12% | 78.52% | 75.63% | 74.19% |
| Operating profit margin | 2.66% | 0.04% | -4.17% | 2.32% | 2.49% |
| Pretax margin | 4.90% | 2.06% | -4.93% | -0.05% | 0.43% |
| Net profit margin | 2.13% | -1.46% | -7.59% | -1.65% | -2.23% |
Altair Engineering Inc's profitability ratios have shown positive trends in recent years. The company's gross profit margin has consistently improved from 74.19% in 2020 to 81.25% in 2024, indicating efficient cost management and potentially increasing product pricing power.
However, the operating profit margin experienced a decline in 2022 with a negative value of -4.17%, but it recovered in the following years, reaching 2.66% in 2024. This suggests that Altair was able to control its operating expenses and improve operational efficiency over time.
The pretax margin also exhibited variability, ranging from -4.93% in 2022 to 4.90% in 2024. The positive trend indicates that the company's pre-tax profitability has been improving, possibly due to effective strategic decisions and revenue growth.
In terms of net profit margin, Altair Engineering Inc faced challenges in 2022 with a margin of -7.59%, indicating the company's overall profitability was severely impacted. However, the company managed to turn this around and improved its net profit margin to 2.13% in 2024, indicating successful cost-cutting measures or revenue-enhancing strategies.
Overall, Altair Engineering Inc has demonstrated resilience and the ability to adapt to changing market conditions, as reflected in its improving profitability ratios over the years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.22% | 0.02% | -1.98% | 1.06% | 1.41% |
| Return on assets (ROA) | 0.98% | -0.65% | -3.60% | -0.76% | -1.27% |
| Return on total capital | 4.49% | 2.63% | -4.18% | 1.92% | 3.59% |
| Return on equity (ROE) | 1.65% | -1.25% | -7.62% | -1.43% | -2.77% |
Altair Engineering Inc's profitability ratios display mixed performance over the period from December 31, 2020, to December 31, 2024.
1. Operating return on assets (Operating ROA) indicates the company's ability to generate profit from its operational activities. Altair's Operating ROA declined from 1.41% in 2020 to 1.06% in 2021, and then fell into the negative territory at -1.98% in 2022 before recovering slightly to 0.02% in 2023 and improving to 1.22% in 2024. The negative Operating ROA in 2022 signals operational inefficiencies that impacted the company's profitability.
2. Return on assets (ROA) reflects Altair's overall ability to generate profit from its assets. The company's ROA remained negative from 2020 to 2023, demonstrating that Altair was not effectively utilizing its assets to generate profits. However, there was a positive turnaround in 2024 with an ROA of 0.98%, indicating a potential improvement in asset utilization and profitability.
3. Return on total capital measures Altair's profitability in relation to both equity and debt capital. The company's Return on total capital fluctuated during the period, with a notable decline to -4.18% in 2022, suggesting the company may have faced challenges in generating returns to cover its capital costs. However, there was a recovery in subsequent years, reaching 4.49% in 2024, indicating improved capital efficiency.
4. Return on equity (ROE) signifies Altair's profitability from shareholders' perspective. The company's ROE remained negative from 2020 to 2023, indicating that Altair was not efficiently generating returns for its equity holders. However, there was a positive ROE of 1.65% in 2024, suggesting a turnaround in profitability for shareholders.
Overall, Altair Engineering Inc's profitability ratios reflect a mix of challenges and improvements, with signs of recovery in some areas by the end of the period under consideration. Continued monitoring and analysis of these ratios will be essential to assess the company's financial performance and prospects.