Alpha Technology Group Ltd (NASDAQ: ATGL)

Sector: Technology Industry: Software - Infrastructure CIK: 0001967621
Market Cap 366.13 Mn
P/B 116.14
P/E -40.46
P/S 385.14
ROIC (Qtr) 0.00
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 643,207.97
Debt/Equity (Qtr) 0.20

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 3.97M provide 6.79x coverage of short-term debt 585348.71, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 4.48M provides 6.97x coverage of total debt 643207.97, indicating robust asset backing and low credit risk.
  • Tangible assets of 4.48M provide exceptional 16.84x coverage of deferred revenue 265986.25, showing strong service capability backing.
  • Operating cash flow of (1.69M) fully covers other non-current liabilities (265986.25) by 6.36x, showing strong long-term stability.
  • Tangible assets of 4.48M provide robust 11.59x coverage of other current liabilities 386625.32, indicating strong asset backing.

Bear case

  • Operating cash flow of (1.69M) provides insufficient coverage of deferred revenue obligations of 265986.25, which is -6.36x, raising concerns about future service delivery capabilities.
  • Free cash flow of (1.79M) provides weak coverage of capital expenditures of 100919.79, with a -17.76 ratio suggesting additional external financing needs for growth initiatives.
  • The company's operating cash flow of (1.69M) shows concerning coverage of stock compensation expenses of 5.57M, with a -0.30 ratio indicating potential earnings quality issues.
  • Operating earnings of (9.04M) show weak coverage of depreciation charges of 153587.53, with a -58.86 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (1.79M) represents just -4.55x of debt issuance 393864.91, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,197.34 Bn 26.81 10.47 57.61 Bn
2 ORCL Oracle Corp 506.93 Bn 48.84 12.87 124.39 Bn
3 PLTR Palantir Technologies Inc. 341.64 Bn 311.89 87.69 0.24 Bn
4 PANW Palo Alto Networks Inc 118.39 Bn 105.97 12.39 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 109.19 Bn -347.56 23.92 0.82 Bn
6 SNPS Synopsys Inc 76.22 Bn 57.21 10.80 14.29 Bn
7 FTNT Fortinet, Inc. 62.40 Bn 33.30 9.52 1.00 Bn
8 NET Cloudflare, Inc. 60.91 Bn -591.17 30.25 3.50 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 10.94 2.43
EV to Cash from Ops. EV/CFO -28.98 11.30
EV to Debt EV to Debt 76.20 9.88
EV to EBIT EV/EBIT -5.42 -8.20
EV to EBITDA EV/EBITDA -6.83 8.19
EV to Free Cash Flow [EV/FCF] EV/FCF -27.35 30.23
EV to Market Cap EV to Market Cap 0.13 0.35
EV to Revenue EV/Rev 51.55 35.31
Price to Book Value [P/B] P/B 116.14 4.88
Price to Earnings [P/E] P/E -40.46 -13.51
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.26
Dividend Payout Ratio % Dividend Payout Ratio % 0.00 2.68
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 0.00 1.68
Interest Coverage Interest Coverage -61.56 -11.94
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % -848.77 -410.36
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -25.83 224.71
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT Growth (1y) % -1,189.78 18.75
EBITDA Growth (1y) % EBITDA Growth (1y) % -911.13 42.50
EBIT Growth (1y) % EBIT Growth (1y) % -1,209.23 13.21
EBT Growth (1y) % EBT Growth (1y) % -1,205.73 7.35
EPS Growth (1y) % EPS Growth (1y) % 0.00 68.33
FCF Growth (1y) % FCF Growth (1y) % 28.99 293.84
Gross Profit Growth (1y) % Gross Profit Growth (1y) % -43.52 47.71
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Utilization Ratio 0.03 0.68
Cash Payout Ratio Cash Payout Ratio 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 3.13 1.21
Current Ratio Curr Ratio (Qtr) 3.33 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.20 -0.95
Interest Cover Ratio Interest Cover Ratio -61.56 -11.94
Times Interest Earned Times Interest Earned -61.56 -11.94
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % -934.70 -550.26
EBIT Margin % EBIT Margin % -7,398.00 -242.75
EBT Margin % EBT Margin % -966.35 -608.84
Gross Margin % Gross Margin % 49.20 52.38
Net Profit Margin % Net Profit Margin % -952.00 -611.52