AtriCure, Inc. (NASDAQ: ATRC)

Sector: Healthcare Industry: Medical Instruments & Supplies CIK: 0001323885
Market Cap 1.56 Bn
P/B 3.26
P/E -54.05
P/S 3.00
ROIC (Qtr) -15.05
Div Yield % 0.00
Rev 1y % (Qtr) 15.84
Total Debt (Qtr) 73.73 Mn
Debt/Equity (Qtr) 0.15
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About

AtriCure, Inc. (ATRC) is a prominent player in the medical device industry, specializing in the development and commercialization of products for atrial fibrillation (Afib) treatment, left atrial appendage (LAA) management, and post-operative pain management. The company's offerings cater to the needs of cardiothoracic surgeons, cardiologists, and electrophysiologists, with a focus on providing effective and minimally invasive solutions. AtriCure's primary business activities involve the creation of innovative medical devices designed to address...

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Investment thesis

Bull case

  • Strong operating cash flow of 43.14M provides robust 0.59x coverage of total debt 73.73M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 350.52M provides 4.75x coverage of total debt 73.73M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 33M exceeds capital expenditure of 10.14M by 3.25x, indicating strong organic growth funding capability.
  • Tangible assets of 350.52M provide robust 6.69x coverage of other current liabilities 52.37M, indicating strong asset backing.
  • Operating cash flow of 43.14M fully covers other non-current liabilities 7.36M by 5.86x, showing strong long-term stability.

Bear case

  • Operating cash flow of 43.14M barely covers its investment activities of (26.64M), with a coverage ratio of -1.62, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (26.64M) provide weak support for R&D spending of 109.66M, which is -0.24x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 147.87M provide limited coverage of acquisition spending of (17M), which is -8.70x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 43.14M shows concerning coverage of stock compensation expenses of 43.81M, with a 0.98 ratio indicating potential earnings quality issues.
  • Operating earnings of (22M) show weak coverage of depreciation charges of 20.25M, with a -1.09 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Medical Instruments & Supplies
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ISRG Intuitive Surgical Inc 176.13 Bn 61.67 17.50 0.00 Bn
2 BDX Becton Dickinson & Co 50.84 Bn 28.94 2.32 19.54 Bn
3 ALC Alcon Inc 39.87 Bn 38.08 3.91 5.24 Bn
4 RMD Resmed Inc 37.63 Bn 36.86 8.03 0.85 Bn
5 HOLX Hologic Inc 16.89 Bn 31.05 4.09 2.52 Bn
6 COO Cooper Companies, Inc. 16.34 Bn 43.59 3.99 2.51 Bn
7 WST West Pharmaceutical Services Inc 15.98 Bn 228.35 15.87 0.32 Bn
8 ALGN Align Technology Inc 13.70 Bn 36.21 3.44 0.09 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.38 2.69
EV to Cash from Ops. EV/CFO 35.11 33.85
EV to Debt EV to Debt 20.54 26.88
EV to EBIT EV/EBIT -68.84 21.42
EV to EBITDA EV/EBITDA -243.85 13.45
EV to Free Cash Flow [EV/FCF] EV/FCF 45.89 108.54
EV to Market Cap EV to Market Cap 0.97 -4.25
EV to Revenue EV/Rev 2.92 291.65
Price to Book Value [P/B] P/B 3.26 6.13
Price to Earnings [P/E] P/E -54.05 168.84
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -1.12
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.62
Dividend per Basic Share Div per Share (Qtr) 0.00 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.48
Interest Coverage Int. cover (Qtr) -3.78 11.77
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -154.90 -62.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 13.45 419.59
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -1.67
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 28.83 -57.55
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 61.36 -107.89
EBIT Growth (1y) % EBIT 1y % (Qtr) 29.11 -37.41
EBT Growth (1y) % EBT 1y % (Qtr) 26.37 -40.02
EPS Growth (1y) % EPS 1y % (Qtr) 26.51 -9.45
FCF Growth (1y) % FCF 1y % (Qtr) 14.31 57.56
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.94 66.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.82 0.54
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 1.90 2.52
Current Ratio Curr Ratio (Qtr) 3.87 7.80
Debt to Equity Ratio Debt/Equity (Qtr) 0.15 0.55
Interest Cover Ratio Int Coverage (Qtr) -3.78 11.77
Times Interest Earned Times Interest Earned (Qtr) -3.78 11.77
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.30 -2,368.82
EBIT Margin % EBIT Margin % (Qtr) -4.24 -2,472.83
EBT Margin % EBT Margin % (Qtr) -5.37 -2,442.75
Gross Margin % Gross Margin % (Qtr) 74.90 29.78
Net Profit Margin % Net Margin % (Qtr) -5.60 -2,438.72