Value
9.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.2 |
| Fwd P/E | 8.1 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 14.7x
- ▸PEG: 0.09
- ▸Attractively valued
ATEC · Why this verdict
Why Alphatec Holdings (ATEC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Alphatec Holdings presents an unusual combination: three consecutive reported earnings beats with over 130% average positive surprise, a PEG ratio of 0.08, more than 75% upside to analyst targets, and positive free cash flow despite GAAP losses — but an extreme put-to-call ratio of 23.50, a confirmed declining long-term price trend, and a high-severity supplier concentration risk temper near-term conviction, warranting a cautious watch rather than immediate entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Despite reporting GAAP losses, the company generates a positive free cash flow margin of 7% and a free cash flow yield of 4.3%, indicating that operating cash generation is healthier than headline net income suggests. Quality breakdown | Free cash flow margin expanding above 10% over the next 12 months would confirm that the divergence between GAAP losses and actual cash generation is widening favorably. | →Stable |
| CounterPositive free cash flow from a GAAP-loss business can reflect working capital timing rather than durable operating strength; if revenue growth slows, the free cash flow margin could quickly turn negative. | ||
Three of the four most recently reported quarters show positive earnings surprises with an average upside of over 130%, indicating a pattern of consistently delivering above analyst expectations across multiple reporting periods. Earnings | A fourth consecutive positive earnings surprise in the next reported quarter would deepen confidence that the beat pattern is structural rather than episodic. | →Stable |
| CounterThe high average positive surprise may reflect a period of deliberately conservative analyst expectations that are now being reset upward, making future beats harder to achieve even if underlying operations remain sound. | ||
The stock trades at a forward price-to-earnings multiple of 14.4 times and a PEG ratio of 0.08, while analyst price targets imply more than 75% upside from current levels — suggesting the market has not yet fully credited the growth trajectory. Valuation breakdown | Analyst price target consensus rising above $18 would reflect growing recognition of the growth potential and validate the valuation gap thesis. | →Stable |
| CounterIf the growth rate underpinning the low PEG decelerates — for example, due to reimbursement headwinds or competitive pressure — the multiple would compress toward fair value, making the current price look full rather than cheap. | ||
A put-to-call ratio of 23.50 is extreme and reflects deeply bearish options market positioning; separately, a single HIGH-severity supplier concentration risk identified in regulatory filings creates a tail risk that could disrupt operations without an alternative supply agreement in place. Risk breakdown | The put-to-call ratio compressing below 5.00 from the current 23.50 and the supplier concentration risk being mitigated via a secondary supply agreement would signal both sentiment and operational risk have normalized. | →Stable |
| CounterExtreme put-to-call ratios in small-cap names can reflect thinly traded options with limited open interest rather than genuine directional conviction, and may overstate the degree of actual bearish sentiment. | ||
The 200-day moving average is sloping downward at over 5% per month and the stock trades below it, indicating a confirmed declining long-term price trend despite improving near-term momentum indicators. Momentum breakdown | The stock recovering above its 200-day moving average with the slope turning positive over 20 consecutive trading days would signal the long-term trend has reversed. | →Stable |
| CounterNear-term momentum has recovered to above the constructive threshold, and if the earnings beat streak continues, the price could reclaim the 200-day moving average faster than the current slope implies. | ||
Despite reporting GAAP losses, the company generates a positive free cash flow margin of 7% and a free cash flow yield of 4.3%, indicating that operating cash generation is healthier than headline net income suggests.
→StableQuality breakdown
- Expectation
- Free cash flow margin expanding above 10% over the next 12 months would confirm that the divergence between GAAP losses and actual cash generation is widening favorably.
CounterPositive free cash flow from a GAAP-loss business can reflect working capital timing rather than durable operating strength; if revenue growth slows, the free cash flow margin could quickly turn negative.
Three of the four most recently reported quarters show positive earnings surprises with an average upside of over 130%, indicating a pattern of consistently delivering above analyst expectations across multiple reporting periods.
→StableEarnings
- Expectation
- A fourth consecutive positive earnings surprise in the next reported quarter would deepen confidence that the beat pattern is structural rather than episodic.
CounterThe high average positive surprise may reflect a period of deliberately conservative analyst expectations that are now being reset upward, making future beats harder to achieve even if underlying operations remain sound.
The stock trades at a forward price-to-earnings multiple of 14.4 times and a PEG ratio of 0.08, while analyst price targets imply more than 75% upside from current levels — suggesting the market has not yet fully credited the growth trajectory.
→StableValuation breakdown
- Expectation
- Analyst price target consensus rising above $18 would reflect growing recognition of the growth potential and validate the valuation gap thesis.
CounterIf the growth rate underpinning the low PEG decelerates — for example, due to reimbursement headwinds or competitive pressure — the multiple would compress toward fair value, making the current price look full rather than cheap.
A put-to-call ratio of 23.50 is extreme and reflects deeply bearish options market positioning; separately, a single HIGH-severity supplier concentration risk identified in regulatory filings creates a tail risk that could disrupt operations without an alternative supply agreement in place.
→StableRisk breakdown
- Expectation
- The put-to-call ratio compressing below 5.00 from the current 23.50 and the supplier concentration risk being mitigated via a secondary supply agreement would signal both sentiment and operational risk have normalized.
CounterExtreme put-to-call ratios in small-cap names can reflect thinly traded options with limited open interest rather than genuine directional conviction, and may overstate the degree of actual bearish sentiment.
The 200-day moving average is sloping downward at over 5% per month and the stock trades below it, indicating a confirmed declining long-term price trend despite improving near-term momentum indicators.
→StableMomentum breakdown
- Expectation
- The stock recovering above its 200-day moving average with the slope turning positive over 20 consecutive trading days would signal the long-term trend has reversed.
CounterNear-term momentum has recovered to above the constructive threshold, and if the earnings beat streak continues, the price could reclaim the 200-day moving average faster than the current slope implies.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 0.0 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 6.7 |
| FCF quality | 4.9 |
| Moat | 6.5 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸FCF-positive despite GAAP loss (FCF margin 7%, FCF yield 4.2%)
- ▸Rule of 40: 21 (fail)
Growth
8.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.9 |
| EPS growth | 10.0 |
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 8.8 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 10.0 |
| vol acceleration | 8.6 |
- ▸Overbought bear rally (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.6%/30d — confirmed downtrend
- ▸Volume surge (2.3x avg) on up move
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 10.0 |
| erm sentiment | 5.1 |
- ▸Analyst upside: 92%
Insider
6.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 6.5 |
| holder change | 5.1 |
- ▸Modest insider buying — $947,732 (0.073% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.3 |
| quality rank | 1.8 |
| growth rank | 6.5 |
Technical
1.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.1 |
| support resistance | 2.7 |
| 52w position | 0.0 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.5 |
| days to cover | 8.3 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 1.4 |
| max pain risk | 7.0 |
| beta | 7.8 |
| debt equity | 0.0 |
- ▸High IV: 72%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:7.4>=5.5
- ASYMMETRY:4.5>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:36d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=7.4>=5.0 recovering
- 8K_FLAG:1.02
Reward-to-Risk
4.48
Upside
+67.3%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 71
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $1.3B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 9.1) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 4.48 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 9.1, Growth at 8.0, and Catalyst at 7.5; the weakest are Technical at 1.3, Peer rank at 3.9, and Quality at 4.2. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 4.48 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Three of the four most recently reported quarters show positive earnings surprises with an average upside of over 130%, indicating a pattern of consistently delivering above analyst expectations across multiple reporting periods.
Trip ifEPS surprise falls below 0% for 2 consecutive reported quarters.
- P2The stock trades at a forward price-to-earnings multiple of 14.4 times and a PEG ratio of 0.08, while analyst price targets imply more than 75% upside from current levels — suggesting the market has not yet fully credited the growth trajectory.
Trip ifForward price-to-earnings multiple expands above 25x from the current 14.4x, indicating the market has priced in the growth trajectory.
- P3Despite reporting GAAP losses, the company generates a positive free cash flow margin of 7% and a free cash flow yield of 4.3%, indicating that operating cash generation is healthier than headline net income suggests.
Trip ifFree cash flow margin falls below 0% for 2 consecutive quarters.
- P4A put-to-call ratio of 23.50 is extreme and reflects deeply bearish options market positioning; separately, a single HIGH-severity supplier concentration risk identified in regulatory filings creates a tail risk that could disrupt operations without an alternative supply agreement in place.
Trip ifPut/call ratio compresses below 5.00 from the current 23.50.
- P5The 200-day moving average is sloping downward at over 5% per month and the stock trades below it, indicating a confirmed declining long-term price trend despite improving near-term momentum indicators.
Trip ifStock closes above its 200-day moving average for more than 20 consecutive trading days with the MA slope turning positive.