Alphatec Holdings, Inc.'s (NASDAQ:ATEC): Alphatec Holdings, Inc., a medical technology company, designs, develops, and markets products for the surgical treatment of spine disorders. The US$356m market-cap posted a loss in its most recent financial year of -US$42.3m and a latest trailing-twelve-month loss of -US$58.7m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on ATEC’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for ATEC’s growth and when analysts expect the company to become profitable.
Consensus from the 3 Medical Equipment analysts is ATEC is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$41m in 2022. Therefore, ATEC is expected to breakeven roughly 3 years from now. In order to meet this breakeven date, I calculated the rate at which ATEC must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, ATEC may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for ATEC given that this is a high-level summary, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one issue worth mentioning. ATEC currently has a debt-to-equity ratio of 131%. Typically, debt shouldn’t exceed 40% of your equity, which in ATEC’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are too many aspects of ATEC to cover in one brief article, but the key fundamentals for the company can all be found in one place – ATEC’s company page on Simply Wall St. I’ve also compiled a list of important factors you should look at:
- Historical Track Record: What has ATEC's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Alphatec Holdings’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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