Alphatec Holdings, Inc. (NASDAQ:ATEC) Capital Efficiency Analysis
Alphatec Holdings, Inc. (NASDAQ:ATEC) is a medical technology company that focuses on the design, development, and advancement of products for the surgical treatment of spine disorders. The company operates in a competitive landscape alongside peers like AtriCure, Inc., Orthofix Medical Inc., AngioDynamics, Inc., and Addus HomeCare Corporation. These companies also operate in the medical technology and healthcare sectors, each with its own focus and market strategies.
In evaluating Alphatec Holdings, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. ATEC’s ROIC is -19.95%, while its WACC is 9.10%. This results in a ROIC to WACC ratio of -2.19, indicating that the company is not generating enough returns to cover its cost of capital. This negative ratio suggests inefficiencies in capital utilization.
Comparatively, AtriCure, Inc. has a ROIC of -7.60% and a WACC of 10.89%, leading to a ROIC to WACC ratio of -0.70. Orthofix Medical Inc. shows a ROIC of -10.55% against a WACC of 10.13%, resulting in a ratio of -1.04. AngioDynamics, Inc. presents a ROIC of -15.03% and a WACC of 6.90%, with a ratio of -2.18. These figures indicate that these companies, like ATEC, are also struggling to generate returns that exceed their cost of capital.
In contrast, Addus HomeCare Corporation stands out with a positive ROIC of 5.99% and a WACC of 9.13%, resulting in a ROIC to WACC ratio of 0.66. This positive ratio suggests that Addus HomeCare is effectively utilizing its capital to generate returns that surpass its cost of capital, highlighting its superior capital efficiency compared to its peers.
Overall, while Alphatec Holdings and most of its peers face challenges in generating sufficient returns on invested capital, Addus HomeCare Corporation demonstrates a more efficient use of capital, as evidenced by its positive ROIC to WACC ratio. This comparison underscores the importance of these financial metrics in assessing a company’s capital efficiency and overall financial health.
