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SPNE

SeaSpine Holdings NasdaqGS:SPNE Stock Report

Last Price

US$5.80

Market Cap

US$215.7m

7D

-13.4%

1Y

-64.5%

Updated

23 Sep, 2022

Data

Company Financials +
SPNE fundamental analysis
Snowflake Score
Valuation3/6
Future Growth1/6
Past Performance0/6
Financial Health3/6
Dividends0/6

SPNE Stock Overview

SeaSpine Holdings Corporation, a medical technology company, focuses on the design, development, and commercialization of surgical solutions for the treatment of spinal disorders in the United States and internationally.

SeaSpine Holdings Competitors

Price History & Performance

Summary of all time highs, changes and price drops for SeaSpine Holdings
Historical stock prices
Current Share PriceUS$5.80
52 Week HighUS$16.75
52 Week LowUS$5.54
Beta1.34
1 Month Change-17.85%
3 Month Change-12.12%
1 Year Change-64.50%
3 Year Change-51.87%
5 Year Change-48.31%
Change since IPO-72.38%

Recent News & Updates

Sep 22

SeaSpine: Bottom Line Fundamentals Continue To Soften

Summary The operating losses continue for SPNE, widening the spread between top-to-bottom-line performance. Investors have continued to punish the stock in H2 FY22 despite the broad medtech sector catching a strong bid. Without the return on capital or free cash flow on hand, SPNE doesn't align with our US equity strategy. Net-net I reiterate that SPNE is a hold and reinstate the $4.58 valuation. Investment Summary Following its latest set of numbers I've reiterated the hold rating on SeaSpine Holdings Corporation (SPNE) and note that little has changed in the investment debate. In the previous analysis I conducted on the company (see: here) I noted there were several downside risks that were yet to be fully realized at the company level. Most notably, the lack of profitability coupled with consistent free cash flow ("FCF") burn were the most unattractive features at the time, seeing as we're looking to capture profitable, quality names in medtech this year. From the previous analysis, before the Q2 FY22 earnings, the following points were noted: Operating leverage had averaged down to -1.4x in the past 2 years. SPNE's harvested zero return from its invested capital and has realized a series of losses on investment instead. Investors had realized a cumulative $21.80 loss in FCF/share from Q3 F19-Q1 FY22. Multiple downside targets were in place with respect to price distribution and valuations. From the most recent set of numbers, not much has changed to this outlook. With this in mind, I continue to rate SPNE a hold with a $4.58 valuation. SPNE Q2 earnings again soft The company came in with another set of mixed numbers, with upsides versus consensus at the top-line only. Revenue of $56.3 million ("mm") was up c.18.5% YoY and pulled down to a gross profit of $37.9mm, up 24% YoY as well. Segmentally, growth was strong as well, with a 22.8% YoY expansion in the spinal implants and enabling business. Exhibit 1. Revenue distribution evenly split between both segments. Top-line growth continues to impress with double-digit gains in turnover with each segment It's the inability to bring this growth to the bottom-line and FCF that are mitigating factors in the investment debate Data: Adapted from SPNE Q2 FY2210-Q However, it also printed an operating loss of $14.53mm, behind the loss of $11.1mm the year prior and brought this down to a net loss of $13.9mm of loss per share of $0.38. As seen in Exhibit 2, the spread in performance from top-bottom line growth continues to widen for SPNE on a sequential basis. Whilst revenue continues to tick up since listing in 2015, bottom-line fundamentals haven't enjoyed the same upswing. The gap in operating and FCF losses is now near its widest on TTM figures, whereas the realized FCF yield has tumbled to its lowest mark on record. These are unattractive features in the current investment landscape, much less so when looking ahead. Ideally, I'd be looking for SPNE to narrow this gap in operating performance seen below, versus trends widening. This is particularly important as the cost of capital rises and abundant liquidity dries up. Should the company need to raise additional cash from the ongoing operating losses, it would have to head to the high-yield debt capital markets, or raise additional dilutive equity, itself commanding a premium at present. Exhibit 2. Operating performance continues to widen from top-bottom line on a sequential basis The 'gap' isn't narrowing, and this is a risk in the forward-looking economic landscape Realized FCF yield is a concern when benchmarked to corporate value and is unsupportive of a bullish view. This is whilst SPNE's market cap drops to its lowest marks since listing.

Shareholder Returns

SPNEUS Medical EquipmentUS Market
7D-13.4%-7.0%-5.2%
1Y-64.5%-32.8%-23.1%

Return vs Industry: SPNE underperformed the US Medical Equipment industry which returned -32.6% over the past year.

Return vs Market: SPNE underperformed the US Market which returned -21.6% over the past year.

Price Volatility

Is SPNE's price volatile compared to industry and market?
SPNE volatility
SPNE Average Weekly Movement7.1%
Medical Equipment Industry Average Movement8.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.9%
10% least volatile stocks in US Market2.8%

Stable Share Price: SPNE is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: SPNE's weekly volatility (7%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2015523Keith Valentinehttps://www.seaspine.com

SeaSpine Holdings Corporation, a medical technology company, focuses on the design, development, and commercialization of surgical solutions for the treatment of spinal disorders in the United States and internationally. It offers orthobiologics and spinal implant solutions for the neurosurgeons and orthopedic spine surgeons to perform fusion procedures in the lumbar, thoracic, and cervical spine. The company’s orthobiologics products include demineralized bone matrix (DBM), collagen ceramic matrices, demineralized cancellous allograft bone products, and synthetic bone void fillers to improve bone fusion rates in a range of orthopedic surgeries, including spine, hip, and extremities procedures.

SeaSpine Holdings Fundamentals Summary

How do SeaSpine Holdings's earnings and revenue compare to its market cap?
SPNE fundamental statistics
Market CapUS$215.69m
Earnings (TTM)-US$66.96m
Revenue (TTM)US$209.05m

1.0x

P/S Ratio

-3.2x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SPNE income statement (TTM)
RevenueUS$209.05m
Cost of RevenueUS$79.07m
Gross ProfitUS$129.98m
Other ExpensesUS$196.94m
Earnings-US$66.96m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-1.80
Gross Margin62.18%
Net Profit Margin-32.03%
Debt/Equity Ratio8.7%

How did SPNE perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is SPNE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SPNE?

Other financial metrics that can be useful for relative valuation.

SPNE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.9x
Enterprise Value/EBITDA-4.3x
PEG Ration/a

Price to Sales Ratio vs Peers

How does SPNE's PS Ratio compare to its peers?

SPNE PS Ratio vs Peers
The above table shows the PS ratio for SPNE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average6.7x
SRTS Sensus Healthcare
5x13.0%US$204.8m
APEN Apollo Endosurgery
3.1x29.2%US$209.5m
EDAP EDAP TMS
5.2x15.3%US$258.0m
CLPT ClearPoint Neuro
13.6x25.7%US$260.1m
SPNE SeaSpine Holdings
1x12.9%US$215.7m

Price-To-Sales vs Peers: SPNE is good value based on its Price-To-Sales Ratio (1x) compared to the peer average (6.7x).


Price to Earnings Ratio vs Industry

How does SPNE's PE Ratio compare vs other companies in the US Medical Equipment Industry?

Price-To-Sales vs Industry: SPNE is good value based on its Price-To-Sales Ratio (1x) compared to the US Medical Equipment industry average (3.9x)


Price to Sales Ratio vs Fair Ratio

What is SPNE's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SPNE PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio1x
Fair PS Ratio2.8x

Price-To-Sales vs Fair Ratio: SPNE is good value based on its Price-To-Sales Ratio (1x) compared to the estimated Fair Price-To-Sales Ratio (2.8x).


Share Price vs Fair Value

What is the Fair Price of SPNE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: Insufficient data to calculate SPNE's fair value for valuation analysis.

Significantly Below Fair Value: Insufficient data to calculate SPNE's fair value for valuation analysis.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is SeaSpine Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


20.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPNE is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: SPNE is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: SPNE is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: SPNE's revenue (12.9% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: SPNE's revenue (12.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SPNE's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has SeaSpine Holdings performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-12.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SPNE is currently unprofitable.

Growing Profit Margin: SPNE is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SPNE is unprofitable, and losses have increased over the past 5 years at a rate of 12.3% per year.

Accelerating Growth: Unable to compare SPNE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SPNE is unprofitable, making it difficult to compare its past year earnings growth to the Medical Equipment industry (0.6%).


Return on Equity

High ROE: SPNE has a negative Return on Equity (-23.35%), as it is currently unprofitable.


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Financial Health

How is SeaSpine Holdings's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: SPNE's short term assets ($190.0M) exceed its short term liabilities ($54.4M).

Long Term Liabilities: SPNE's short term assets ($190.0M) exceed its long term liabilities ($44.3M).


Debt to Equity History and Analysis

Debt Level: SPNE has more cash than its total debt.

Reducing Debt: SPNE's debt to equity ratio has increased from 3.7% to 8.7% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: SPNE has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: SPNE has less than a year of cash runway if free cash flow continues to reduce at historical rates of 25.1% each year


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Dividend

What is SeaSpine Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate SPNE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SPNE's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SPNE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SPNE's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SPNE has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure


CEO

Keith Valentine (54 yo)

7.33yrs

Tenure

US$2,093,155

Compensation

Mr. Keith C. Valentine serves as Non-Executive Chair of the Board at Locate Bio Limited since January 5, 2021. He has been the Chief Executive Officer of SeaSpine Holdings Corporation since May 2015 and ha...


CEO Compensation Analysis

Compensation vs Market: Keith's total compensation ($USD2.09M) is about average for companies of similar size in the US market ($USD1.68M).

Compensation vs Earnings: Keith's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: SPNE's management team is seasoned and experienced (5.8 years average tenure).


Board Members

Experienced Board: SPNE's board of directors are considered experienced (7.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Top Shareholders

Top 25 shareholders own 72.57% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
18.9%
First Light Asset Management, LLC
7,030,309$40.8m0.35%4.6%
7%
BlackRock, Inc.
2,603,103$15.1m6.57%no data
5.41%
Avidity Partners Management, L.P.
2,010,000$11.7m0%0.28%
5.37%
Tru St Partnership LP
1,997,068$11.6m0%no data
4.61%
Emerald Advisers, LLC
1,713,586$9.9m2.41%0.27%
4.29%
The Vanguard Group, Inc.
1,597,056$9.3m-0.69%no data
2.5%
Driehaus Capital Management LLC
929,479$5.4m-34.57%0.06%
2.27%
Dimensional Fund Advisors LP
843,492$4.9m8.44%no data
2.24%
Manulife Asset Management
833,646$4.8m-22.03%no data
1.87%
Novo Holdings A/S
694,677$4.0m-19.11%0.01%
1.81%
AWM Investment Company Inc
671,950$3.9m-5.49%0.59%
1.7%
State Street Global Advisors, Inc.
630,999$3.7m-8.5%no data
1.61%
Geode Capital Management, LLC
598,919$3.5m5.08%no data
1.51%
Silvercrest Asset Management Group LLC
562,054$3.3m-4.29%0.03%
1.49%
Altrinsic Global Advisors, LLC
552,274$3.2m0%0.1%
1.26%
Renaissance Technologies LLC
469,000$2.7m21.57%no data
1.24%
Stuart Essig
460,275$2.7m3.59%no data
1.15%
Wells Fargo & Company, Securities and Brokerage Investments
426,060$2.5m31.34%no data
1.1%
Paradigm Capital Management, Inc.
407,900$2.4m-26.91%0.17%
1.03%
Mutual of America Capital Management LLC
383,008$2.2m-35.45%0.03%
0.96%
GW&K Investment Management, LLC
355,358$2.1m-2.37%0.02%
0.91%
Northern Trust Global Investments
339,955$2.0m4.16%no data
0.88%
Keith Valentine
328,784$1.9m0.73%no data
0.84%
Highmark Wealth Management LLC
310,659$1.8m0.66%1.53%
0.64%
Next Century Growth Investors LLC
237,866$1.4m3.24%0.17%

Company Information

SeaSpine Holdings Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: SeaSpine Holdings Corporation
  • Ticker: SPNE
  • Exchange: NasdaqGS
  • Founded: 2015
  • Industry: Health Care Equipment
  • Sector: Healthcare
  • Implied Market Cap: US$215.689m
  • Shares outstanding: 37.19m
  • Website: https://www.seaspine.com

Number of Employees


Location

  • SeaSpine Holdings Corporation
  • 5770 Armada Drive
  • Carlsbad
  • California
  • 92008
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPNENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 2015
46LBST (Boerse-Stuttgart)YesCommon StockDEEURJun 2015

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/23 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.