Alphatec Holdings, Inc. (ATEC): what the price requires
At today's price, Alphatec Holdings, Inc. (ATEC) is priced for -4.1% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ATEC
Headline
| Field | Value |
|---|---|
| Ticker | ATEC |
| Company | Alphatec Holdings, Inc. |
| Current price | $9.76/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | revenue-multiple |
| EV / sales paid | 2.7x |
| Steady-state operating margin assumed | 27.8% |
| Implied growth | -4.1% |
The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.
Solve inputs: computed at a 9.5% cost of capital with 4% terminal growth over a 5-year stage, holding a 27.8% terminal operating margin (69.6% gross margin x the 40% mature-conversion prior); each 1pp of cost of capital moves the implied revenue growth ~4.9pp.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.15σ |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | — | 0 | — |
| Earnings | — | 0 | — |
| Relative | 0.48x | 2 | justifies |
| Growth | 1.06x | 3 | expensive |
Families that justify the price: Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.8%); the inversion above states its own rate.
Per-Model Detail (n=5)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | FCF base $0.0B, growth 23% (input: historical growth), terminal g 4.0%, WACC 6.8%, 7yr projection |
| DCF Exit Multiple | Growth | $9.23 | 1.06x | yes | Exit EV/EBITDA: 122.6x / 124.6x / 126.6x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $20.44 | 0.48x | yes | P/S fallback (negative EPS): Sector P/S 4.0x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | — | — | no | — |
| Two-Stage Excess Return | Asset | — | — | no | — |
| Discounted Future Market Cap | Growth | $9.06 | 1.08x | yes | Rev $0.8B, growth 23% (input: historical growth; tapered), Terminal P/S: 1.5x / 1.9x / 2.3x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | $12.03 | 0.81x | yes | Margin ramp: -16% → 12% over 7yr, rev growth 23% (input: historical growth; tapered) |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | $0.01 | 975.50x | yes | EBITDA $0.02B × sector EV/EBITDA 16.0x (excluded from median) |
| FCF Yield | Earnings | $0.01 | 975.50x | yes | FCF $6.9M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $20.44 | 0.48x | yes | Revenue $0.79B × sector P/S 4.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $499.0m |
| Interest coverage | -2.1x |
| Share count CAGR (dilution) | 11.4% |
| Burning cash | no |
Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.
Bullet Takeaways
- Alphatec is a fast-growing spine-surgery company taking share by getting surgeons to switch: surgical revenue grew 17% in the first quarter of 2026 on 21% case-volume growth and a 23% increase in new surgeon users, the cleanest sign that its integrated procedure approach is winning adoption.
- The defining risk is that the company is still unprofitable and leveraged: it carries roughly $639 million of gross debt against about $140 million of liquid assets, the share count is growing about 11% a year, and the price assumes a margin expansion the company has not yet demonstrated.
- Watch the path to profitability: management guides full-year 2026 revenue around $882 million with adjusted operating earnings near $134 million and positive free cash flow, the milestones that would convert the growth story into a self-funding business.
Bull Case
The number that defines Alphatec is the direction of its surgeon base. In the first quarter of 2026, surgical revenue grew 17% to $178 million, but the underlying drivers are stronger than the headline: case volume rose 21% and new surgeon users grew 23%. In spine surgery, the surgeon is the customer who chooses the implant on the table, so a rising count of new surgeon users is the leading indicator of revenue years out. The company's entire strategy is built on this: the 10-K describes a portfolio of approaches, including "Lateral TransPsoas (LTP) and Midline ALIF approaches" that were "built from the ground up, fully integrated with SafeOp, and designed to enable single-position surgery," which is the kind of procedural advantage that pulls surgeons away from the incumbents.
The bet is that an integrated system beats a catalog of parts. Alphatec is not selling screws and rods against larger rivals on price; it is selling a connected procedure, implants, intraoperative neuromonitoring through SafeOp, and the EOS imaging and informatics platform, that aims to make the operation itself better and more reproducible. The 10-K frames the commercial task plainly: to succeed the company "must convince the spine surgeon community that our products are an attractive alternative" to what they use today, and the adoption metrics say that argument is landing. Revenue growing 14% overall with surgical up 17%, against a backdrop where the much larger incumbents grow low single digits, is the share-shift the thesis predicts.
The inflection that matters is on the bottom line. The first-quarter net loss narrowed sharply to $33.9 million from $51.9 million a year earlier as litigation costs fell, and management is guiding the full year to roughly $134 million of adjusted operating earnings and at least $20 million of free cash flow, with operating cash flow positive for a fourth straight quarter. A refinanced bank facility cut annual interest expense by more than $6 million and pushed debt maturities out to 2031, removing the near-term refinancing pressure. The bull case is that Alphatec has already proven it can grow and take share; the remaining question is operating leverage, and the recent prints show the loss shrinking and cash turning the right way. If the company hits its margin guidance, the stock stops being a growth-at-any-cost story and becomes a profitable share-gainer in a large, durable surgical market.
Bear Case
The price leans on a specific future that has not arrived: that Alphatec converts its fast-growing revenue into the kind of operating margin a mature medical-device company earns. Today it does not. The company is still losing money at the operating line, with a trailing operating margin around negative 8%, and the entire valuation depends on that margin climbing toward the high-20s over time. That is the single most fragile assumption in the stock. Spine surgery is a real, growing market, but it is also, in the company's own words, "highly competitive, subject to rapid technological change and affected by new products and market activities of industry participants," and Alphatec's competitors are far larger, with deeper sales forces and the balance sheets to defend share on price. Taking 17% surgical growth is impressive; holding the pricing and mix needed to reach a high-20s operating margin against incumbents who can discount is a different and harder bet.
The balance sheet narrows the room to be patient. Alphatec carries roughly $639 million of gross debt against about $140 million of liquid assets, leaving net debt near $499 million on a business that does not yet generate consistent free cash flow. The refinancing helped, but the leverage is real, and a high-growth medical-device company funds its growth, the instrument sets, the inventory, the sales expansion, with cash it has been raising partly by issuing stock. The share count has grown about 11% a year, which dilutes existing holders even as the business expands, so per-share value has to outrun the new shares. The 10-K also flags that the company's ability to use its accumulated tax losses "may be limited" under the tax code, which trims one of the offsets a newly profitable company would otherwise enjoy.
Execution risk is concrete and recent. The EOS imaging platform, a piece of the integrated story, contributed only about $14 million in the quarter and lagged its targets on installation delays, a reminder that not every part of the system is ramping on plan. The valuation does have a cushion the pre-revenue names lack: measured against sales, the price sits at only about 2.6 times revenue, which on a peer-multiple basis reads as cheap rather than stretched, and the company's recent growth is within what it has delivered. But that cushion is conditional on the margin story playing out. If revenue growth decelerates toward the broader market rate, or if the path to a high-20s margin stalls, the stock loses the one support, future profitability, that the price is built on, and a leveraged, still-unprofitable company trading on forward promise is exactly the kind of name the market re-rates quickly when the promise slips.
Valuation
Alphatec is the unusual case where the price looks cheap and demanding at the same time, and the resolution is in the timing. Because the company is not yet earning a normal operating profit, the price is measured against sales, and on that basis it trades at only about 2.6 times revenue, a multiple so modest that the price sits below what even a 5%-a-year revenue decline would warrant. The peer-multiple lens agrees: applied at a sector price-to-sales multiple, the relative methods land well above today's $8.81 (June 27, 2026). So the static read is not that the stock is expensive; it is that the market is paying a low multiple of current sales for a company growing in the mid-teens.
The catch is the margin assumption embedded underneath. Holding revenue at the low multiple still requires the business to eventually earn an operating margin near 28%, derived from its roughly 70% gross margin and a normal device-company conversion. The near-term growth pace is within what Alphatec has recently delivered, so the stretch is not the growth rate; it is how long the company must sustain growth while expanding margin from a loss today to a high-20s operating margin in maturity. That is the whole bet. The relative-multiple and growth methods both reach or exceed the price, which is why the framework reads the priced-in assumption as broadly within range rather than extreme. This is closer to a reasonably priced growth story than to a moonshot, provided the margin conversion happens.
Solvency is where the patience runs out if the plan slips. The company carries roughly $639 million of gross debt against about $140 million of liquid assets, with operating income still negative, so the usual coverage and payback ratios cannot be computed honestly. The refinanced facility extended maturities to 2031 and cut interest cost, which buys time, but the structure still depends on the business turning cash-generative on schedule. The published analyst price targets cluster well above the current price, in the high teens, which credits the margin-expansion path the static methods cannot yet confirm; that gap between the street's target and today's price is the value of the profitability inflection the company is guiding toward but has not yet booked. The buyer at today's price is paying a low multiple of sales and underwriting the margin, not the growth.
Catalysts
The first quarter of 2026 was a clean read on the thesis. Total revenue grew 14% to $192.1 million, surgical revenue rose 17% to $178 million on 21% case-volume growth, and new surgeon users climbed 23%, while the net loss narrowed to $33.9 million from $51.9 million a year earlier as litigation expense fell. The standout disappointment was EOS, the imaging platform, which contributed only about $14 million and lagged its targets on installation timing, the one part of the integrated story not yet ramping on plan. Management reaffirmed a full-year 2026 outlook of roughly 15% revenue growth to about $882 million, adjusted operating earnings near $134 million, and at least $20 million of free cash flow, which makes the next two prints a direct test of whether the profitability inflection is real.
The financing side moved in the company's favor. Alphatec secured a new bank facility expected to cut annual interest expense by more than $6 million and to extend debt maturities to 2031, easing the balance-sheet pressure that hangs over a still-unprofitable grower. Analyst sentiment is constructive, with a consensus Buy rating and average price targets in the high teens, well above the current level, reflecting confidence in the surgical-share and margin story even after the EOS shortfall. The next earnings report, and specifically the surgical growth rate, the adjusted operating-earnings margin, and free cash flow against guidance, are the events that will confirm or challenge the path the price is underwriting.
Peer Cohorts (Per Segment, With Filing Citations)
Spinal Surgery Products & Services (reported)
- GMED (GLOBUS MEDICAL, INC.)
- (no filing in the citation store)
- AORT (ARTIVION, INC.)
- (no filing in the citation store)
- ATRC (AtriCure, Inc.)
- (no filing in the citation store)
- AXGN (AXOGEN, INC.)
- (no filing in the citation store)
- PRCT (PROCEPT BioRobotics Corporation)
- (no filing in the citation store)
- PEN (Penumbra, Inc)
- (no filing in the citation store)
- INSP (Inspire Medical Systems, Inc.)
- (no filing in the citation store)
- TNDM (Tandem Diabetes Care, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 FY2026 results, May 2026 · Q1 FY2026 guidance, May 2026 · Q1 FY2026 results and guidance, May 2026 · company 8-K, 2026 · analyst consensus, TipRanks / public.com, 2026 · analyst consensus, TipRanks / public.com, June 2026