Alphatec Holdings (ATEC) is a medical technology company specializing in designing and developing spinal fusion technology solutions for treating spinal disorders. Their products are also used in the surgical treatment of cervical thoracolumbar and intervertebral areas of the spine and other major spinal surgical processes. Located in California, Alphatec markets its products via direct sales representatives and agents.
Valued at a market cap of $1.45 billion, ATEC is a member of the small-cap benchmark Russell 2000 Index (RUT).
Alphatec stock is down 31% this year. The shares suffered a major blow after reporting Q1 results in early May, plummeting 21.9% in a single session.
ATEC Sells Off After Earnings
Alphatec reported its first-quarter results after the close on May 7, with revenue of $138.5 million surpassing Wall Street’s $134.4 million estimate, and growing 27% YoY.
The company notched a substantial rise in its surgical revenue, which grew by 30%, while surgical volume increased 23%, and average revenue per surgery ticked up 6%. Alphatec also hosted 150 surgical training seminars as it continues to foster its U.S. presence with 28% growth in established territories.
The company's Q1 net loss totaled $48.5 million, or $0.34 per share, which just missed analysts' consensus estimate for a narrower loss of $0.33 per share. ATEC has a history of reporting wider-than-forecast losses, which seems to have left investors disappointed.
Alphatec ended the quarter with $144 million in cash and $527 million in debt, with cash use at $70 million for the quarter. The company estimates cash use to taper down toward the end of the year, ultimately totaling around $100 million for 2024.
On the conference call, CFO Todd Koning seemed optimistic that Alphatec's financials are near an inflection point, explaining, "We are on the cusp of self-sustaining growth with profit generation poised to more than cover the asset investment that the long-term growth of our business requires. And that explains how we will achieve cash flow breakeven in 2025 and cash flow positivity beyond."
Here's How Analysts Rank ATEC Stock
Analysts have a very bullish view on ATEC stock, with a consensus “Strong Buy” rating and a mean price target of $22.35. That suggests expected upside potential of 117.8% from here.
Currently, there are a total of 11 analysts covering Alphatec, with 10 maintaining a “Strong Buy” rating, and 1 recommending a “Moderate Buy” rating.
