U.S. Markets close in 3 hrs 27 mins

When Will Alphatec Holdings, Inc. (NASDAQ:ATEC) Turn A Profit?

Simply Wall St

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.

Check out our latest analysis for Alphatec Holdings

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.

NasdaqGS:ATEC Past and Future Earnings, August 16th 2019

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.

Next Steps:

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:

  1. 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.
  2. 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.
  3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.