Alphatec Holdings (ATEC) AI Stock Analysis

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Alphatec Holdings

(NASDAQ:ATEC)

Rating:56Neutral

Price Target:―

Alphatec Holdings demonstrates strong revenue growth and improved cash flow management, enhancing its financial outlook in the competitive medical devices sector. However, high operating expenses, negative net income, and significant leverage are key risks. While technical indicators show upward momentum, valuation remains challenging with a negative P/E ratio. The earnings call provided a positive outlook, supporting a moderately favorable overall score.

Positive Factors

Financial Performance

Alphatec reported total revenues of $169M for the quarter, slightly higher than consensus estimate of $168M.

Market Position

ATEC's work to drive clinical differentiation with its enabling technologies and procedural solutions appears to be paying off, as ATEC notes it is an 8% market share player, the largest pure-play spine company.

Strategic Execution

ATEC's OUS strategy is progressing with regulatory clearances in Australia and Japan progressing as planned.

Negative Factors

Insurance Reimbursement

ATEC has not seen any change or disruption to its SafeOp franchise despite changes in reimbursement by a large insurance provider affecting competitors.

Tariff Impact

ATEC's tariff impact is manageable in the low-single digit millions.

Alphatec Holdings (ATEC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.80B

Dividend YieldN/A

Average Volume (3M)1.70M

Price to Earnings (P/E)―

Beta (1Y)1.14

Revenue Growth25.53%

EPS Growth23.22%

CountryUS

Employees867

SectorHealthcare

Sector Strength41

IndustryMedical - Devices

Share Statistics

EPS (TTM)-0.11

Shares Outstanding146,172,700

10 Day Avg. Volume1,356,567

30 Day Avg. Volume1,704,541

Financial Highlights & Ratios

PEG Ratio12.11

Price to Book (P/B)31.84

Price to Sales (P/S)0.00

P/FCF Ratio-21.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$18.55

Price Target Upside51.06% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering10

Alphatec Holdings Business Overview & Revenue Model

Company DescriptionAlphatec Holdings, Inc., a medical technology company, designs, develops, and advances technologies for the surgical treatment of spinal disorders. The company offers SafeOp Neural InformatiX System, an Alpha InformatiX product platform designed to reduce the risk of intraoperative nerve injury; Sigma transforaminal lumbar interbody fusion pedicle-based access system that provides direct visualization of anatomical landmarks; Sigma PTP Access and Patient Positioning System; squadron lateral retractor designed to maximize patient outcomes; Invictus Spinal Fixation System, a thoracolumbar fixation system to treat a range of pathologies; and Invictus MIS SingleStep System that provides minimally invasive pedicle screw placement. It also provides Invictus Modular Fixation Systems designed to increase adaptability with the power of screw modularity; OsseoScrew system to restore the integrity of the spinal column; Arsenal spinal fixation system, a comprehensive thoracolumbar fixation platform to fix a range of degenerative to deformity pathologies and surgical procedures; Aspida Anterior Lumbar Plating System, a fixation system for anterior lumbar interbody fusion; AMP Anti-Migration Plate; OCT Spinal Fixation System; trestle luxe anterior cervical plate system; and Insignia Anterior Cervical Plate System. In addition, the company offers IdentiTi Porous Ti, Transcend Lateral, and Battalion Posterior Interbody Implants; and biologics consisting of Cervical Structural Allograft Spacers, 3D ProFuse Demineralized Bone Scaffold, Neocore Osteoconductive Matrix, Alphagraft Demineralized and Cellular Bone Matrix, and Amnioshield Amniotic Tissue Barrier, as well as EOS imaging products. It sells its products through a network of independent distributors and direct sales representatives in the United States. The company was founded in 1990 and is headquartered in Carlsbad, California.

How the Company Makes MoneyAlphatec Holdings generates revenue primarily through the sale of its spinal fusion products to hospitals and healthcare providers. The company's key revenue streams include the direct sale of spinal implants and surgical instruments. Significant partnerships with distributors and healthcare institutions also play a crucial role in expanding its market reach and enhancing product adoption. Alphatec's growth strategy involves continuous innovation in product development, leveraging clinical data to validate the efficacy of its solutions, and expanding its sales force to increase market penetration.

Alphatec Holdings Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 11.03%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

ATEC reported a strong start to 2025 with significant revenue growth, increased surgeon adoption, and improved cash flow management. However, the company faced challenges with gross margin declines and tariff-related costs. The strategic expansion in international markets and advancements in their procedural solutions provide a positive outlook.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

ATEC reported a 22% revenue growth to $169 million in Q1 2025, with surgical revenue growing by 24% year-over-year.

Surgeon Adoption Increase

The number of surgeons utilizing ATEC procedures increased by 18%, contributing to a 17% procedural volume growth.

Adjusted EBITDA Improvement

Adjusted EBITDA was $11 million, representing an 800 basis point improvement compared to the prior year and marking the second best quarter ever for ATEC.

EOS Order Growth

Record EOS order volume fueled a 28% year-over-year increase in the order book, indicating strong demand for ATEC's informatics solutions.

Cash Flow Management

Free cash use improved by $55 million over Q1 2024, and ATEC ended the quarter with $153 million in cash on hand.

International Expansion Success

ATEC is making progress in international markets, including Australia, New Zealand, and Japan, with notable adoption of their lateral procedures.

Negative Updates

Gross Margin Decline

Non-GAAP gross margin dropped by 50 basis points compared to the previous year, driven by product mix changes.

Tariff Exposure

ATEC expects low single-digit millions of dollars in costs related to tariffs in the second half of 2025, affecting EOS systems imported from France.

Working Capital Headwinds

Modest and transient working capital headwinds affected cash flow performance, though metrics are expected to improve over the year.

Company Guidance

In the call, ATEC's leadership provided guidance for the fiscal year 2025, highlighting strong financial performance and optimistic projections. The company reported a 22% year-over-year increase in total revenue for the first quarter, reaching $169 million, with surgical revenue growing by 24% to $152 million. ATEC's adjusted EBITDA for the quarter was $11 million, marking the second-best quarter in its history and indicating significant profitability improvements. The company also noted a positive cash flow trajectory, with cash burn in the first quarter at the low end of expectations at $15 million. Looking forward, ATEC expects full-year revenue growth of 20%, reaching approximately $734 million, and an adjusted EBITDA of $78 million, up from previous guidance of $75 million. The guidance reflects confidence in continued strong revenue growth, profitability, and cash flow, fueled by surgical volume growth and strategic investments in sales infrastructure and procedural innovations.

Alphatec Holdings Financial Statement Overview

Summary

Alphatec Holdings has demonstrated strong revenue growth in the medical devices industry, reaching $589 million TTM from $144 million in 2020. However, challenges exist with profitability, evidenced by negative net income and EBIT margins. A high debt-to-equity ratio and consistently negative free cash flow underscore financial risks, although strategic financing supports liquidity.

Income Statement

Neutral

Alphatec Holdings has shown significant revenue growth over the years, with TTM revenue at $589 million compared to $144 million in 2020. However, the company is struggling with profitability as indicated by consistently negative net income and EBIT margins. The gross profit margin remains healthy, but low EBIT and EBITDA margins indicate high operating expenses.

Balance Sheet

Negative

The company has a high debt-to-equity ratio due to significant leverage, with total debt at $581 million against equity of $55 million in the latest TTM. Although assets have been growing, equity remains low, suggesting potential solvency concerns. Positive cash and short-term investments provide some liquidity cushion.

Cash Flow

Neutral

Alphatec Holdings has consistently negative free cash flow, indicating challenges in generating cash from operations after capital expenditures. The operating cash flow to net income ratio is negative, reflecting operational inefficiencies. However, financing activities have provided cash inflows, supporting liquidity.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
642.26M	611.56M	482.26M	350.87M	243.21M	144.86M
	Gross Profit
423.03M	424.26M	310.20M	233.06M	157.76M	102.50M
	EBIT
-131.86M	-136.17M	-173.40M	-121.10M	-108.87M	-46.09M
	EBITDA
-73.86M	-53.87M	-110.59M	-102.58M	-106.88M	-54.84M
	Net Income Common Stockholders
-165.53M	-162.12M	-186.64M	-152.15M	-144.33M	-78.99M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
153.24M	138.84M	220.97M	84.70M	187.25M	107.77M
	Total Assets
785.47M	775.71M	805.21M	513.38M	572.05M	261.22M
	Total Debt
581.27M	609.94M	541.68M	395.86M	4.55M	5.08M
	Net Debt
428.03M	471.10M	320.71M	311.17M	-182.69M	-102.68M
	Total Liabilities
871.41M	789.88M	703.49M	550.09M	492.63M	131.34M
	Stockholders Equity
55.20M	-14.17M	101.72M	-36.71M	79.42M	129.88M
Cash Flow		Free Cash Flow
-80.70M	-137.79M	-165.46M	-133.42M	-141.98M	-70.30M
	Operating Cash Flow
-11.25M	-44.65M	-78.48M	-75.14M	-73.43M	-46.41M
	Investing Cash Flow
-71.13M	-93.14M	-141.97M	-58.28M	-157.76M	-23.86M
	Financing Cash Flow
91.34M	56.21M	356.92M	31.23M	311.97M	130.83M

Alphatec Holdings Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price12.28

Price Trends

50DMA

11.39

Positive

100DMA

11.16

Positive

200DMA

9.29

Positive

Market Momentum

MACD

0.25

Positive

RSI

52.07

Neutral

STOCH

44.73

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATEC, the sentiment is Neutral. The current price of 12.28 is below the 20-day moving average (MA) of 12.59, above the 50-day MA of 11.39, and above the 200-day MA of 9.29, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 52.07 is Neutral, neither overbought nor oversold. The STOCH value of 44.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ATEC.

Alphatec Holdings Risk Analysis

Alphatec Holdings disclosed 38 risk factors in its most recent earnings report. Alphatec Holdings reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

The use of artificial intelligence ("AI") technology by our employees or business partners could result in misuse or loss of proprietary information, violation of laws and regulations, or damage to our reputation and credibility. Q4, 2024

Alphatec Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (53)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNMD	73 Outperform	$1.76B	14.92	12.96%	1.41%	4.20%	43.62%
SIBN	72 Outperform	$805.41M	―	-15.96%	―	22.60%	41.26%
KIDS	66 Neutral	$494.39M	―	-11.33%	―	31.28%	-81.86%
ATEC	56 Neutral	$1.80B	―	-291.71%	―	25.53%	23.22%
Sector *	53 Neutral	$5.25B	3.24	-45.38%	2.81%	16.79%	-0.06%
OPK	51 Neutral	$1.09B	―	-3.04%	―	-13.79%	82.82%
OFIX	47 Neutral	$424.72M	―	-27.82%	―	5.85%	-8.92%

* Healthcare Sector Average

Performance Comparison

ATEC

Alphatec Holdings

12.28

2.02

19.69%

CNMD

Conmed

56.57

-19.47

-25.60%

OPK

Opko Health

1.34

0.00

0.00%

OFIX

Orthofix

10.90

-2.64

-19.50%

KIDS

OrthoPediatrics

20.12

-11.18

-35.72%

SIBN

SI-Bone

18.49

5.13

38.40%

Alphatec Holdings Corporate Events

Executive/Board Changes

Alphatec Holdings Implements Executive Salary Conversion Plan

Neutral

Apr 3, 2025

On March 31, 2025, Alphatec Holdings implemented a salary conversion plan for its executives, reducing their cash salaries by 10%, 25%, or 50% in exchange for restricted stock units (RSUs). This plan, affecting Named Executive Officers, grants RSUs based on the stock’s closing price on March 31, 2025, with vesting scheduled for August 5 and December 5, 2025. The plan does not alter existing employment agreements or incentive programs, maintaining the original base salary as the reference for 2025 incentive compensation.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.