Critical Survey: Orthofix Medical (NASDAQ:OFIX) & Alphatec (NASDAQ:ATEC)

Orthofix Medical (NASDAQ:OFIX) and Alphatec (NASDAQ:ATEC) are both small-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Risk and Volatility

Orthofix Medical has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Alphatec has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Profitability

This table compares Orthofix Medical and Alphatec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orthofix Medical	-11.21%	-20.38%	-11.03%
Alphatec	-18.76%	N/A	-18.18%

Earnings and Valuation

This table compares Orthofix Medical and Alphatec”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orthofix Medical	$822.31 million	0.60	-$92.19 million	($2.34)	-5.29
Alphatec	$764.16 million	2.16	-$143.36 million	($0.95)	-11.47

Orthofix Medical has higher revenue and earnings than Alphatec. Alphatec is trading at a lower price-to-earnings ratio than Orthofix Medical, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

89.8% of Orthofix Medical shares are owned by institutional investors. Comparatively, 66.4% of Alphatec shares are owned by institutional investors. 1.3% of Orthofix Medical shares are owned by insiders. Comparatively, 22.8% of Alphatec shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Orthofix Medical and Alphatec, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orthofix Medical	1	2	3	0	2.33
Alphatec	1	1	9	1	2.83

Orthofix Medical currently has a consensus target price of $17.25, suggesting a potential upside of 39.34%. Alphatec has a consensus target price of $22.82, suggesting a potential upside of 109.34%. Given Alphatec’s stronger consensus rating and higher probable upside, analysts clearly believe Alphatec is more favorable than Orthofix Medical.

Summary

Alphatec beats Orthofix Medical on 9 of the 15 factors compared between the two stocks.

About Orthofix Medical

Orthofix Medical Inc. operates as a spine and orthopedics company in the United States, Italy, Germany, the United Kingdom, France, Brazil, and internationally. It operates through two segments, Global Spine and Global Orthopedics. The Global Spine segment manufactures and distributes bone growth stimulator devices for enhance of bone fusion, including adjunctive and noninvasive treatment of cervical and lumbar spine, as well as a therapeutic treatment for non-spine; designs, develops, and markets a portfolio of motion preservation and fixation implant products, which are used in surgical procedures of the spine; and offers biological products, such as fiber-based and particulate demineralized bone matrices, cellular bone allografts, collagen ceramic matrices, and synthetic bone void fillers, and tissue forms, which allow physicians to treat various spinal and orthopedic conditions. This segment also designs, develops, and markets a portfolio of navigation technologies, including tracked surgical tools, intelligent software, and imaging equipment based on machine-vision and optical innovations. The Global Orthopedics segment offers products and solutions that allow physicians to treat various orthopedic conditions related to limb reconstruction and deformity correction unrelated to the spine. This segment designs, develops, and markets external and internal fixation orthopedic products that are coupled with enabling digital technologies to serve the complete patient treatment pathway. It sells its products through distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers. The company was formerly known as Orthofix International N.V. and changed its name to Orthofix Medical Inc. in 2018. Orthofix Medical Inc. was founded in 1980 and is headquartered in Lewisville, Texas.

About Alphatec

Alphatec Holdings, Inc., a medical technology company, designs, develops, and advances technologies for the surgical treatment of spinal disorders in the United States and internationally. It manufactures and sells implants and instruments through third-party suppliers. The company offers Alpha InformatiX product platform, including EOS imaging system that provides full-body imaging; VEA alignment mobile application, which leverages EOS technology to more quickly quantify alignment parameters on a mobile device; SafeOp Neural InformatiX System that automates electromyographic and somatosensory evoked potential monitoring; and Valence, an intra-operative system that integrates navigation and robotics into spine procedures, as well as Sigma Prone TransPsoas (PTP) Access and PTP Patient Positioning Systems. It also provides split-blade retractors; Sigma-ALIF Access System, a procedure-specific access system; spinal implants and fixation systems comprising NanoTec surface modifications, Calibrate PSX, and Invictus, as well as various standalone implants for height restoration and stabilization. In addition, the company provides biologics comprising 3D ProFuse Osteoconductive Bioscaffold for ease of handling and better endplate-to-endplate contact; AlphaGRAFT Demineralized Bone Matrix (DBM) comprising demineralized human tissues; AlphaGRAFT DBM Fibers comprising demineralized fibers; AlphaGRAFT Cellular Bone Matrix (CBM), a growth factor-enriched cellular bone matrix; AlphaGRAFT CBM that is delivered in granular, fiber, or structural form; BioCORE Moldable Bioactive Graft, a synthetic mineral-collagen composite matrix that can be molded to fit the bone defect; and Amnioshield Amniotic Tissue Barrier, an allograft for spinal surgical barrier applications. The company sells its products through a network of independent sales agents and direct sales representatives. Alphatec Holdings, Inc. was founded in 1990 and is headquartered in Carlsbad, California.