Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors

You're looking at Alta Equipment Group Inc. (ALTG) and seeing a stock that's struggled, and honestly, the Q3 2025 numbers show why: the company reported revenue of just $422.6 million, a miss against analyst expectations, and a significant net loss available to common stockholders of $(42.3) million, translating to a diluted net loss per share of $(1.31). That's a tough quarter, driven by a 5.8% organic reduction in equipment sales as customers delayed purchases, which is defintely a red flag on the demand side. Still, a seasoned analyst looks past the headline miss; the company's full-year 2025 Adjusted EBITDA guidance is still projected between $168.0 million and $172.0 million, and they saw a strong October with construction equipment sales hitting $75 million, suggesting a potential near-term rebound. The real question is how they manage their high debt-to-equity ratio of 27.13 and an extremely low interest coverage ratio of 0.25, especially as they try to capitalize on the new infrastructure funding.

Revenue Analysis

You're looking at Alta Equipment Group Inc. (ALTG)'s revenue, and the headline for Q3 2025 is a clear slowdown: total revenue fell by $26.2 million year-over-year to $422.6 million. That represents a 5.8% decline, which is a significant dip for an equipment distributor, but the story gets more nuanced when you look inside the numbers.

The company's revenue model is diversified across equipment sales, rentals, and product support (parts and service), which is a key stability factor. For Q3 2025, new and used equipment sales accounted for roughly half of total revenue, but the higher-margin product support segment showed resilience, which is defintely a positive sign.

Breakdown of Primary Revenue Sources (Q3 2025)

Alta Equipment Group Inc. (ALTG) generates its sales from five core areas. While equipment sales are the largest component, the product support lines-Parts and Service-are the most reliable and highest-margin businesses, and they held up well despite the overall revenue contraction.

• New and Used Equipment Sales: $211.1 million
• Parts Sales: $75.3 million
• Service Revenue: $66.4 million
• Rental Revenue: $48.4 million
• Rental Equipment Sales: $21.4 million

The Product Support segment (Parts and Service) collectively brought in $141.7 million for the quarter, and this segment actually grew by 1.1% year-over-year, which is the kind of consistent, high-margin revenue stream that veteran analysts like to see.

Segment Contribution and Growth Trends

The company operates primarily through two segments: Construction Equipment and Material Handling, plus a smaller Master Distribution unit. The recent revenue decline is almost entirely attributable to the Construction side, which saw a major strategic shift.

Here's the quick math on how the business segments contributed to the Q3 2025 total revenue and their year-over-year change:

The Construction Equipment segment alone was responsible for a $20.7 million reduction in revenue for the quarter. The Material Handling segment, in contrast, was relatively stable, declining by only $1.0 million to finish at $167.9 million.

Analysis of Significant Revenue Changes

The drop in Construction Equipment revenue wasn't just a market headwind; it was a deliberate, strategic move. Management executed a 'fleet optimization strategy' aimed at aligning supply with demand for lightly used rental equipment. This resulted in the total rental fleet size being approximately $40 million below the prior year period, which directly impacts rental and rental equipment sales revenue.

Also, Alta Equipment Group Inc. (ALTG) has been refining its focus by rationalizing non-core assets. For instance, in Q1 2025, the company divested its aerial fleet rental business in the Chicago market for $18.0 million in cash, which is a one-time revenue impact that cleans up the long-term business profile. They also completed the divestiture of the Dock and Door division for $6.4 million. These moves reduce near-term revenue but improve capital allocation and focus. For a deeper dive into who is betting on these strategic shifts, you should be Exploring Alta Equipment Group Inc. (ALTG) Investor Profile: Who's Buying and Why?

Profitability Metrics

You're looking for a clear picture of how Alta Equipment Group Inc. (ALTG) turns revenue into profit, especially given the mixed economic signals in the heavy equipment sector. The direct takeaway is that while the company's core product support business is highly profitable, overall margins in 2025 have been pressured by equipment sales, leading to net losses for the first three quarters.

Here's the quick math on the first half of 2025: Alta Equipment Group Inc.'s total revenue for the first three quarters of the year was approximately $1.327 billion ($423.0 million in Q1, $481.2 million in Q2, and $422.6 million in Q3). The company has been operating at a net loss, which is a key risk to monitor. For example, the net loss available to common stockholders in Q3 2025 was $(42.3) million, resulting in a Net Profit Margin of about -10.01% for that quarter.

Gross and Net Margin Trends

The profitability trend in 2025 shows a clear split between the high-margin service business and the lower-margin equipment sales. The overall Gross Profit Margin-the percentage of revenue remaining after subtracting the cost of goods sold-has fluctuated, but the trend points to margin pressure in the core equipment sales. The quarterly margins for 2025 tell the story:

• Q1 2025 Gross Profit Margin: Approximately 27.19% (Calculated from $115.0 million Gross Profit on $423.0 million Revenue).
• Q2 2025 Gross Profit Margin: 23.84%.
• Q3 2025 Product Support Gross Profit Percentage: 47.2%.

The strength is defintely in the recurring revenue from product support (parts and service), which saw its gross profit percentage increase to 47.2% in Q3 2025. This is a critical operational efficiency metric, showing that the company's service department is excellent at managing costs and pricing. Still, the overall Q3 Net Profit Margin of -10.01% highlights that high selling, general, and administrative expenses (SG&A) and interest costs are eating up the gross profit from all segments, pushing the bottom line into the red. For a deeper look at who is betting on this turnaround, you should read Exploring Alta Equipment Group Inc. (ALTG) Investor Profile: Who's Buying and Why?

Operational Efficiency and Industry Comparison

When we look at operational efficiency, we often use Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) as a proxy for operating profit, especially in asset-heavy businesses like this. Alta Equipment Group Inc.'s full-year 2025 Adjusted EBITDA guidance is between $168.0 million and $172.0 million. This range indicates solid cash-flow generation from operations, but it also shows the high cost of debt and non-cash charges (like depreciation) are the primary culprits for the net losses.

To be fair, the equipment dealership industry is tough. A comparison of operational profitability shows where Alta Equipment Group Inc. stands:

The key action item here is to watch how management executes on its cost control. They reduced selling, general, and administrative expenses (SG&A) by $4.7 million year-over-year in Q3 2025, which is a good sign for operational focus. But until the net profit margin turns positive, the stock will remain a speculative play on operational turnaround and debt management.

Debt vs. Equity Structure

You need to know how Alta Equipment Group Inc. (ALTG) is funding its operations, and honestly, the picture shows a company leaning heavily on debt, which is typical for equipment dealerships but at an extreme level. The critical takeaway is that ALTG's financial structure is highly leveraged, meaning a small drop in asset value or a rise in interest rates can have a magnified impact on their equity.

As of the most recent quarter, September 30, 2025, Alta Equipment Group Inc.'s Debt-to-Equity (D/E) ratio stood at a staggering 418.52. That number is defintely a red flag when you compare it to the industry average for 'Rental & Leasing Services,' which is around 1.31, or 'Auto & Truck Dealerships,' which is about 1.61. This means for every dollar of shareholder equity, the company has over $418 in debt, a clear sign of high financial leverage (the use of borrowed money to finance assets).

Here's the quick math on their Q2 2025 balance sheet (in millions of dollars), which shows the magnitude of their obligations:

• Total Debt (Most Recent Quarter): $1.22 billion
• Long-Term Debt (Net of Current Portion): $481.8 million
• Current Portion of Long-Term Debt: $11.3 million
• Total Stockholders' Equity: $43.9 million

The total debt figure is driven by the nature of the equipment dealership business, which relies heavily on floor plan payables (a type of short-term financing for inventory), plus a significant $216.2 million net line of credit as of June 30, 2025.

The company is actively trying to balance this debt load with strategic actions, but the pressure is clear. In Q1 2025, management suspended the quarterly common stock dividend indefinitely, which is a classic move to conserve cash and protect the balance sheet, rather than returning capital to shareholders. Also, they completed the divestiture of their aerial fleet rental business in the Chicago market for $18.0 million in cash, specifically earmarking the proceeds for debt reduction.

Still, they are also engaging in equity-side actions, announcing a $30 million share buyback program and repurchasing 1,145,604 shares for approximately $6.5 million in Q2 2025. This suggests management believes the stock is undervalued, even with the heavy debt load. To be fair, the debt is a core part of their capital structure, which S&P Global Ratings acknowledges with a 'B' issuer credit rating and a stable outlook, though the recovery rating on their $500 million senior secured second-lien notes is modest at '5' (10%-30% recovery expectation).

This is a high-wire act. You can read more about the full picture in Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need a clear picture of how Alta Equipment Group Inc. (ALTG) can cover its near-term obligations, and the data from 2025 shows a mixed, but manageable, liquidity position. The company's immediate ability to pay its bills relies heavily on inventory, which is typical for an equipment dealer, but still presents a challenge.

As of the most recent trailing twelve months (TTM) data, the company's Current Ratio sits at 1.42. This means Alta Equipment Group Inc. holds $1.42 in current assets for every $1.00 in current liabilities, which is generally acceptable-it's above the crucial 1.0 threshold. But here's the quick math on the quality of those assets: the Quick Ratio (or acid-test ratio), which strips out less-liquid inventory, is only 0.42. That's a low number, honestly.

• Current Ratio: 1.42 (Adequate short-term coverage).
• Quick Ratio: 0.42 (Low, indicating heavy reliance on inventory).

This gap between the two ratios-a full 1.0 point-highlights a significant dependency on selling or financing its equipment inventory to meet short-term debt. If the market for construction and material handling equipment slows, converting that $484.5 million in inventory (as of June 30, 2025) into cash becomes the primary liquidity risk.

Working Capital Trends and Inventory Management

The company is actively managing its working capital (current assets minus current liabilities), which is a positive trend. Total current assets decreased from $774.5 million at the end of 2024 to $739.1 million by June 30, 2025. A key driver was the reduction in inventory, which fell by $51.4 million in the first half of 2025. This reduction is a deliberate move to a leaner balance sheet, which improves capital efficiency, but it also means less buffer if sales unexpectedly spike.

They are trying to right-size their rental fleet, too, with the original equipment cost of the fleet down nearly $30 million year-over-year, aiming to drive better utilization and returns on invested capital (ROIC). This focus on capital discipline is defintely a strength, helping to mitigate the low quick ratio over the long term.

Cash Flow Statement Overview

Looking at the cash flow statement provides a clearer view of the actual cash generation. For the trailing twelve months ending June 2025, Alta Equipment Group Inc. generated $77.8 million in Operating Cash Flow (OCF). This is a solid, positive figure that shows the core business is generating cash, even while reporting a net loss of ($27.0 million) for the first six months of 2025. The difference is largely due to non-cash charges like depreciation and amortization.

On the investment side, the company has been measured, showing net cash used in investing activities of only $8.4 million for the six months ended June 30, 2025, which is a significant drop from the $34.2 million used in the same period last year. This lower capital expenditure is a key factor in holding their free cash flow guidance steady for the full year.

Financing activities show the company is still relying on debt, but it's also executing on its capital allocation strategy.

They also repurchased over 1.1 million shares for $6.5 million in the second quarter of 2025, a sign that management sees a disparity between the stock price and the business's intrinsic value. This is a direct action that uses cash but can increase shareholder returns.

For a deeper dive into the valuation and strategy, you should read the full analysis: Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Alta Equipment Group Inc. (ALTG) and asking the core question: Is it a bargain or a trap? Based on the latest 2025 fiscal year data, the market is currently pricing ALTG as undervalued relative to its peers, but this is complicated by its negative earnings and high debt load.

The consensus among Wall Street analysts is a Moderate Buy, with an average 12-month price target of $11.00. This suggests a massive potential upside, considering the stock was trading around $4.63 as of mid-November 2025. Honestly, that kind of projected jump-a potential gain of over 138%-should make you dig deeper into the risk profile, not just the reward. One clean one-liner: The stock's valuation is a classic risk-reward puzzle.

Here's the quick math on the key valuation multiples, using data closest to November 2025:

• Price-to-Earnings (P/E) Ratio: The trailing P/E ratio is currently negative, around -2.55 (as of early November 2025), reflecting the net loss reported by the company. You can't use a negative P/E to compare value, but it tells you the company isn't profitable right now.
• Price-to-Book (P/B) Ratio: This ratio stands at an extremely high 65.31 (as of November 2025). What this estimate hides is that the book value (assets minus liabilities) is very low, likely due to intangible assets from acquisitions or accumulated losses, which makes the P/B ratio unreliable for a dealership model like this.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The TTM (Trailing Twelve Months) EV/EBITDA multiple is 13.44 (as of November 2025). This is the most useful metric here. It's a bit rich for a dealership business, which often trades lower, but it's not wildly overvalued when you consider the company's full-year 2025 Adjusted EBITDA guidance is between $171.5 million and $181.5 million.

The stock price trend over the last 12 months shows significant volatility and a clear downtrend. The share price has fallen by approximately 37.6% over the past year, underperforming the broader market. It traded as high as $8.99 and as low as $3.54 (52-week range), but the recent price of $4.63 shows the market's current skepticism, especially following the Q3 2025 net loss of $1.31 per share.

For income-focused investors, Alta Equipment Group Inc. (ALTG) does pay a dividend. The current annual dividend is approximately $0.23 per share, resulting in a yield of around 4.33%. To be fair, a 4%+ yield is attractive, but the payout ratio is negative at about -10.68% based on trailing earnings. This means the dividend is currently being paid out of cash flow or debt, not net income, which is defintely not sustainable long-term without a return to profitability.

The analyst consensus is a mixed bag, which is typical for a turnaround or high-leverage story. Six analysts have weighed in, giving a 'Moderate Buy' consensus. This includes two 'Strong Buy' ratings, one 'Buy,' two 'Hold,' and one 'Sell.' The dispersion is wide, with price targets ranging from a low of $7.00 to a high of $20.00. This tells you there is no single, clear view on the intrinsic value. The recent downgrade to a Hold by DA Davidson on November 12, 2025, with a $7.00 price target, is a near-term risk signal you shouldn't ignore.

The core takeaway is that Alta Equipment Group Inc. (ALTG) is a deep-value play that hinges on a successful execution of its strategy to improve net income and reduce debt. If you want to dive deeper into the operational and strategic risks behind these numbers, you should read the full post: Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors.

Risk Factors

You need to be clear-eyed about the headwinds facing Alta Equipment Group Inc. (ALTG). The company is navigating a tough macro-environment, and while management has taken decisive action, the near-term risks are significant. The core issue is that external market caution is hitting equipment sales, forcing a strategic, but painful, operational reset.

For the third quarter of 2025 (Q3 2025), Alta Equipment Group Inc. reported a net loss of $41.60 million, which is a 50.2% increase in losses compared to the prior year, clearly underscoring the operational and financial challenges.

External and Industry-Specific Risks

The biggest external risk is the persistent market uncertainty, which is causing customers to defer capital investment, especially in material handling and heavy equipment. This is a classic cyclical risk. In Q3 2025, total revenue dipped 5.8% year-over-year to $422.6 million, missing analyst expectations.

• Macroeconomic Headwinds: Ongoing caution related to tariffs and the broader economy, plus the uncertainty of interest rate levels, are suppressing customer demand for new equipment.
• Tariff Pressure: Management specifically cited tariff pressures on its Ecoverse business as a key headwind, which contributed to lowering the high end of the 2025 Adjusted EBITDA guidance.
• Industry Competition: The equipment distribution industry is highly competitive. Alta's Material Handling revenues were essentially flat at $167.9 million in Q3 2025, pressured by this caution and competition.

The market just isn't buying big-ticket items right now.

Operational and Financial Risks

Internally, the company faces risks tied to its balance sheet and a recent legislative change. The high debt burden is a constant pressure point.

• High Leverage: The debt-to-equity ratio is alarmingly high at 24.2x as of June 30, 2025, according to recent analysis. This elevated leverage pressures free cash flow and makes debt reduction a critical priority.
• Legislative Impact (OBBBA): The enactment of the One Big Beautiful Bill Act (OBBBA) legislative changes in 2025 resulted in a non-recurring, non-cash deferred income tax expense of $24.4 million in Q3 2025. This was due to a full valuation allowance against deferred tax assets (DTAs) related to Net Operating Losses (NOLs), reflecting a significant accounting impact on the net loss figure.
• Rental Market Volatility: The Construction Equipment segment's revenue decline was partly due to a strategic fleet optimization effort, a deliberate reduction of the total rental fleet by approximately $40 million from the prior year to enhance earnings quality over volume. This is a necessary move, but it cuts revenue in the short term.

Mitigation Strategies and Clear Actions

To be fair, the management team is not sitting still; they are executing a clear strategy to right-size the business and focus on higher-margin, more resilient segments. Their actions are centered on efficiency and deleveraging.

Here's the quick math: they are aggressively cutting costs and selling off non-core assets to pay down debt.

The focus on product support-parts and service-is defintely the right long-term play, as this is the recurring, high-margin revenue stream (service gross profit percentage increased 40 basis points year over year to 59.8% in Q2 2025) that stabilizes the business against the volatile equipment sales cycle. For a deeper dive into the company's valuation, read our full post: Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Alta Equipment Group Inc. (ALTG) and seeing some recent revenue softness, so you need to know where the growth is coming from next. The core of the opportunity isn't a massive market expansion right now; it's a disciplined focus on high-margin services and a tailwind from infrastructure spending that will defintely drive demand in 2026 and beyond.

The near-term growth story is a rebound from deferred purchases. Management noted that equipment sales delayed in the third quarter of 2025 are expected to boost volumes as customers gain clarity on interest rates and tax incentives. Plus, the company's Construction segment is strongly positioned to benefit from significant infrastructure funding, especially in key regions like Michigan and Florida.

Here's the quick math on the near-term outlook: analysts project Alta Equipment Group Inc.'s 2025 annual revenue to reach approximately $1,950,400,000, representing a forecast annual revenue growth rate of 1.63%. What this estimate hides is the shift in profitability, as the company's full-year 2025 Adjusted EBITDA is still guided by management to be between $168.0 million and $172.0 million.

Strategic Initiatives and Financial Discipline

The company is not just waiting for the market to improve; it's actively refining its business model. The most crucial strategic initiative is the continued focus on the product support business-parts and service-which is a non-cyclical, high-margin revenue stream. For example, the service gross profit percentage increased by 230 basis points year-over-year to 60.1% in the first quarter of 2025.

Alta Equipment Group Inc. is also streamlining its portfolio and managing capital aggressively. In May 2025, the company divested its aerial fleet rental business in the Chicago market for $18.0 million in cash to reduce outstanding debt. Also, they suspended the quarterly dividend to allocate funds to an expanded stock repurchase program, which was increased to $30.0 million. That's a clear signal of management believing the stock is undervalued.

Key growth drivers and strategic actions include:

• Focusing on recurring product support revenue for margin expansion.
• Benefiting from U.S. reindustrialization and grid modernization trends.
• Cost optimization, which led to a $12.2 million reduction in SG&A expenses in Q2 2025.
• Developing an e-mobility business, positioning for future equipment innovation.

Competitive Edge and Earnings Estimates

The company's competitive advantage rests on its integrated dealership platform and exclusive manufacturer partnerships with major original equipment manufacturers (OEMs) like Volvo, Hyster-Yale, and Kubota. This network spans over 85 locations and gives them control over the entire customer lifecycle, from sale to high-margin after-sale service.

Despite the strategic operational improvements, the analyst consensus for 2025 earnings is a net loss of approximately -$82,200,000, reflecting the continued pressure on equipment sales volumes and pricing dynamics seen in the first three quarters of the year. This means the investment thesis hinges on the successful execution of their cost and portfolio optimization strategy, coupled with the anticipated infrastructure-driven demand rebound. You can find more on the foundational strategy here: Mission Statement, Vision, & Core Values of Alta Equipment Group Inc. (ALTG).

To summarize the financial picture for 2025, here are the key projections and results: