A Member of Pat McKeough’s Inner Circle recently asked for his advice on Alphatec Holdings, a medical technology company focused on designing, developing, and advancing innovative solutions for the surgical treatment of spinal disorders.
Pat likes the firm’s growth prospects anchored by its differentiated spine-only focus and integrated procedural ecosystem approach, revenue momentum and a transition to profitability.
Alphatec Holdings Inc. (Symbol ATEC on Nasdaq; www.atecspine.com) is a California-based medical technology company; it develops technology for the surgical treatment of spine disorders.
The company’s products include Alpha InformatiX, which provides imaging, navigation and robotics for spine surgeries, 3D imaging, and spinal implants.
Founded in 1990, Alphatec underwent a transformation in 2018, replacing its executive management, most of its board, and a majority of its staff with spine experts focused on innovation and design.
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Solid growth prospects with plenty of upside
For the three months ended March 31, 2026, Alphatec reported revenue of $192.1 million, a 13.5% increase from $169.2 million a year earlier. Revenue rose due to a 21% increase in surgical procedural volume, driven by expanding surgeon adoption and strong underlying momentum in the core surgical business.
Excluding one-time items, earnings improved to $380,000, or nil per share, from a loss of $7.7 million, or $0.05, a year earlier. The company was able to cut operating costs.
Alphatec’s outlook is positive, despite major rivals in the spine market. They include Johnson & Johnson’s Depuy unit and Medtronic’s Sofamor Danek franchise.
The company’s product portfolio features advanced technologies like the Insight software platform, which, in conjunction with the company’s EOS imaging system, automates the calculation of alignment measures that are critical to spinal surgeries. Along with spinal implants and fixation systems, other key offerings include biologics that facilitate the process of spinal fusion and the SafeOp system, which provides actionable information on both the location and health of nerves during surgery.
The company uses its own salesforce as well as independent agents to sell its technology. It uses third-party manufacturers to make them.
The spine-treatment industry has a generally poor track record in terms of patient outcomes. In fact, about 25% to 30% of U.S. adults who turn to surgery for a spinal deformity will need to undergo surgery again within two to five years of the initial procedure.
That relatively high surgical revision rate (compared to just 3% to 5% for knee and hip replacements) bodes well for Alphatec’s technologies and the industry’s adoption of them. The sales potential for the company’s robotic surgical system to improve patient outcomes is particularly strong.
Recommendation in Pat’s Inner Circle: Alphatec Holdings Inc. is a buy for aggressive investors.
