ATEC stock rose in morning trade on October 8, 2020, after the company reported extraordinary preliminary revenue.
On October 7, 2020, Alphatec Holdings reported preliminary Q3 adjusted EBITDA ($2.2M)-($1.7M). Preliminary, unaudited Q3 results are expected to reflect U.S. revenue growth of 41% to 43% compared to Q3 of 2019. Growth was driven primarily by the continuing adoption of recently released ATEC technologies and pull-through from the SafeOp Neural InformatiX System.
New product sales represented over 70% of estimated U.S. revenue for the quarter. At September 30, the Company had approximately $41M in cash and available borrowings under its senior secured credit facility.
“In a year of considerable uncertainty, ATEC is bringing predictability to both the clinical experience and financial performance,” said Pat Miles, chairman and CEO. “We continue to deliver against the priorities that we committed to early this year: creating clinical distinction, revitalizing the sales force, and compelling surgeon adoption. This team has created significant value by advancing surgical outcomes in spine before, and we are fully committed to doing it again.”
Piper Sandler analyst Matt O’Brien keeps his Overweight rating and $9 price target on Alphatec, stating that its “standout” Q3 performance looks “extraordinary” after the company’s better than expected revenue guidance. The analyst contends that Alphatec’s efforts to “introduce new products, enhance its strategic distribution network, and go deeper with existing surgeons” are all starting to yield “considerable” dividends.
Lake Street analyst Brooks O’Neil raised the firm’s price target on Alphatec to $15 from $13 and keeps a Buy rating on the shares after the company pre-announced “a massive beat on the top and bottom lines” in Q3 despite COVID-19 headwinds. He is certain the momentum continues to build behind the company’s “organic innovation machine” following the pre-announcement, O’Neil tells investors.
Canaccord analyst Kyle Rose raised the firm’s price target on Alphatec to $12 from $9 and keeps a Buy rating on the shares. The analyst noted the company’s very positive Q3 preannouncement which reported revenues well ahead of his expectations and was achieved with the adoption of new products as well as strong pull-through from the utilization of Safe Op Neural InformatiX.
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